NZD/USD 4-Hour Timeframe Analysis

NZD/USD 4-Hour Timeframe Analysis

Trend Analysis
On the 4-hour timeframe, the price is in a major downtrend, with ongoing consolidation creating uncertainty in the market. We have identified some minor key levels, one of which is at 0.56400, which has already been broken. After the breakout, a large volume of sellers accumulated, and we observed a liquidity grab formed below this minor key level.

However, after the liquidity grab, the price failed to push higher and struggled to reach the next minor key resistance. Sellers pushed the price back down to the minor key level, and now we are waiting for another liquidity formation to confirm the next move.

Price Action Expectation:
Our objective is to wait for the price to form another liquidity zone and then look for a break above the minor key level. If this break occurs, we will place a Buy Stop entry.

Fundamental Outlook:
USD Advance GDP q/q: The forecast for Q1 GDP growth is 2.7%, a slowdown from the previous 3.1%. A lower GDP growth rate might indicate weaker U.S. economic strength, which could dampen the bullish pressure on USD and increase the likelihood of a weaker USD in the short term. This could potentially make NZD/USD more favorable for a buy setup, as a weaker USD would likely result in upward pressure on the NZD.

USD Unemployment Claims: The forecast for unemployment claims is 224K, slightly higher than the previous 223K. An increase in unemployment claims could signal weakening labor market conditions in the U.S., further contributing to the potential weakness of the USD and supporting upward momentum for the NZD.

The combination of these news events suggests a potential weakening of the USD, which could lead to increased bullish momentum for NZD/USD, aligning with the buy setup that we are anticipating.

Trade Setup:
Trade Type: Buy Stop
Entry: 0.56520 (after the price breaks above the minor key level)
Stop Loss: 0.56160 (below the minor key, providing protection from false breakouts)
Take Profit: 0.57400 (targeting the next minor key resistance)

Conclusion:
The setup aims to capitalize on a bullish breakout after the liquidity zone forms and the price breaks above the minor key level. Given the weakening USD due to the latest economic data (lower GDP growth and rising unemployment claims), there is a higher probability for NZD/USD to rise. The buy stop entry at 0.56520 targets a move toward 0.57400, with risk managed by placing the stop loss at 0.56160.

Disclaimer: Trading involves substantial risks. Always consult a financial advisor before making trading decisions.