FxWirePro: Chinese trade cushions NZD/USD slumps and stimulates intraday bullish sentiments, more rallies likely upto 7EMA – digital calls to speculate and short hedge

China earlier today showed a sharp rise in trade surplus in March. 

On the back of this Chinese data, bulls of NZDUSD have managed to test the channel support at 0.6905 levels (refer daily charts).

On bullish SMA crossover, the ongoing rallies likely to travel equidistance after breaking channel resistance, for now, the next stiff resistance is seen at 0.7070 levels.

On the contrary, the shooting star pattern evidences downswings below EMAs, bulls bounce back with engulfing pattern to resume consolidation phase but again restrained below 0.7410, momentum bearish bias (refer monthly plotting).

The upswings on this timeframe are likely to restrain below 7EMA, please be advised that more dips seem likely on failure swings at this juncture.

Momentum study: To substantiate the bearish stance available on monthly terms, both leading indicators (RSI & stochastic curves) evidence the bearish convergence that signals strength and momentum in selling interests. While aggressive intraday speculators can also bet on further upswings upto next stiff resistance levels (0.7070 i.e. around 7EMA levels).

Most notably, MACD remaining bearish trajectory on daily and monthly terms is an indication of extending bullish trend in the sessions to come, moreover, the rising volumes with rising prices would be in conformity to the minor uptrend.

Trade tips:

Well, as a result of above technical reasoning, on speculative grounds we advise one touch binary calls that append magnifying effects in yields as the underlying spot keeps spiking. The upside change in every pip can have leveraged shift in payoffs.

On hedging grounds, we also advocate shorting futures contracts of mid-month tenors to arrest potential downside risks upto 0.68 levels again.