NZDUSD Potential Breakout (May 10, 2017)

Price just bounced off support and could be due for a move back to resistance.

The 100 SMA is below the longer-term 200 SMA on this chart so the path of least resistance is to the downside. However, the moving averages could simply be oscillating so range-bound conditions could persist.

Stochastic is on middle ground but is on the move up to show that buyers are in control of price action. If a breakout happens, the pair could move by an additional 100 pips or the same height as the triangle pattern.

The main catalyst for the move could be the upcoming RBNZ interest rate statement. No actual rate changes are expected for now but traders could get some clues on future policy action based on any shift in rhetoric. Economic data from New Zealand has been mostly upbeat so policymakers could signal that they're not looking to cut rates anytime soon.

Only US import prices and the federal budget balance are lined up in the New York session so traders might turn their attention to political headlines. So far, North Korea's announcement about another missile test has kept risk-taking in check and investors are also wary about Comey's resignation. 

By Kate Curtis from Trader's Way