Looking for a NZDUSD breakout

The US Dollar was bearish against most of its major pairs on Wednesday with the exception of the GBP. On the US economic data front, the Mortgage Bankers Association's Mortgage Applications rose 3.8% for the week ending October 30th, compared to +1.7% in the previous week. Automatic Data Processing's Employment Change showed that 365K jobs were added on month in October (643K expected), compared to a revised 753K jobs added in September. Finally, the Trade Deficit shrank to 63.9 billion dollars on month in September (as expected), from a revised 67.0 billion dollars in August.

On Thursday, Initial Jobless Claims for the week ending October 31st are expected to decline to 735K, from 751K in the week before. Continuing Claims for the week ending October 24th are expected to fall to 7,200K, from 7,756K in the prior week. Finally, the Federal Open Market Committee (FOMC) is expected to keep the Federal Funds Target Rate between 0.00% and 0.25%.

The Euro was mixed against all of its major pairs. In Europe, Research firm Markit published final readings of October Services PMI better than expected for the Eurozone at 46.9 (46.2 expected), Germany at 49.5 (48.9 expected), and France 46.5 (as expected) but below expectorations for the U.K. at 51.4 (52.3 expected).

The Australian dollar was bullish against all of its major pairs.

It has been a quiet day on the FOREX front after a volatile evening session as Americans voted for the next President of the United States. One major pair on our radar is the NZD/USD which is up 35 pips. A diamond continuation pattern is in-play. The preference is for a break to the upside which would signal a continuation of the uptrend that started back in March at the pandemic lows. Price action has started to break above the diamond pattern. A break above 0.6795 resistance would be the signal bulls are waiting for. However, a break below 0.6485 support would be a bearish signal with a decline to the next major support level likely at 0.638.

Source: GAIN Capital, TradingView

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