I’m counting on risk aversion to stay in the markets while coronavirus fears are in play, and this pullback could offer a good entry point on NZD/USD.
Short NZD/USD Idea
This pair has formed lower highs that can be connected by a descending trend line since the start of the year. Price looks ready for a test of this falling resistance level that lines up with the Fib retracement levels.
NZD/USD 4-hour Forex Chart
Severely downbeat data from China earlier today could be enough to keep risk-taking in check, as the Caixin services PMI fell from 51.8 to 26.5 in February. Prior to this, the manufacturing PMI dropped from 51.1 to 40.3 to reflect the impact of the coronavirus outbreak on the sector.
Of course I’m also keen on waiting for the ADP non-farm employment release later today, along with the ISM non-manufacturing PMI’s jobs component, to gauge if Friday’s U.S. NFP might meet or beat expectations.
What do you guys think?
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