Forex Trade Setups Commentary: NZDUSD hits 26-year high, 4th July 2011

Trading Setups / Chart in Focus:

NZDUSD

The NZDUSD hit a 26 year high today; we can see that price formed a small pin bar last Friday that showed some rejection of support near the 8 day EMA as well as a horizontal through about 0.8250. We would also point out that two nice pin bars formed off support through 0.8000 on June 16th and June 27th. Note the confluence here: up trend, pullback to horizontal support, EMA’s were crossed higher.

The 8 and 21 day EMAs can be watched for bullish price action setups on any rotations lower this week.

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Forex Commentary:

The New Zealand dollar touched its highest level since in 26 years on Tuesday on technical based stop-loss buying. The kiwi hit a peak of $0.8332, its highest level since it was floated in March 1985.

The Australian dollar fell 0.4 percent to $1.0725 after a surprise fall in Australian retail sales. The Reserve Bank of Australia is expected to keep rates on hold for the eight straight month on Tuesday at 4.75 percent.

The dollar index was flat at 74.333, not far from a near one-month low of 74.133. A slew of U.S. economic data could sway sentiment this week, namely ADP private payrolls data on Wednesday and the U.S. Labor Department’s non-farm payrolls report on Friday.

Other Markets:

On Wall Street Friday stocks opened July with a bang as Wall Street scored its best week in two years after strong manufacturing data eased worries about slowing growth.

The pace of growth in manufacturing picked up for the first time in four months, with an index of national factory activity rising to 55.3 in June from 53.5 in May, Institute for Supply Management (ISM) data showed.

The Dow lost 168.43 points, or 1.36 percent, the S&P 500 added 19.03 points, or 1.44 percent, and the Nasdaq gained 42.51 points, or 1.53 percent.

Upcoming important economic announcements: 7/5/2011

12:30am EST: Australia – Cash Rate
12:30am EST: Australia – RBA Rate Statement
4:30am EST: Britain – Services PMI