Powell keeps USD on track
Yesterday Jerome Powell gave his testimony on the state of the US economy. You can read some of the highlights Greg reported on from the Q and A session here. He was generally upbeat about the US economy and the USD has been bid since his statement. Powell mentioned that inflation was still a big stagnant and looked to an increasein productivity to increase wages.The bottom line is that Powell affirmed the Fed's current rate path of two more hikes this year.
The New Zealand dollar was initially bid on the release of the bank's preferred inflation data.See the release here from Eamonn.However, the initial rally was reversed due to USD strength and a fourth weakGlobal Dairy Trade Price indexfalling by -1.7%. By the end of yesterday's US session the NZD/USD pair had retraced all it's gains and formed a bearish hammer bar in line with the recent trend. So, although the inflation data was good for the NZD it was not enough of a beat to start a sign that the RBNZD might start being bullish on their economy.
NZD/USD shorts look good into recent daily support levels. Price formed a daily bearish hammer bar, see below.
On the intraday 1 hour chart there is an option to go short from current prices with price rejection the 100 and 200 Moving averages and a nearly 'hidden bearish divergence' on the 1 hour chart.
Price has moved a little since taking the screenshot , and any retraces back up to the 100 and 200 MA in the next couple of hours can be seen as options of entering in short at a discount.
Risk to trade: US dollar reversal.
