All attention will be focused on the Feds and BoJ this week. With many arguments going on about how the economy is almost at full employment and last week’s CPI data showing a respectable expansion and pumping up inflation to 1.1% and core prices rising to 2.3% over the past year pushed up by rising health care and housing costs. According to data streaming in, there is a measly 15% chance of a Fed hike this week and with BoJ depending on what the Feds are going to do this week, there are a lot of monetary policy measures at stake and as speculators all we have to do is wait and watch the chart. Despite the probabilities, analysts are still rooting for a rate hike this week basing their reasons on strong US growth and employment conditions which is at its strongest in 10 years and with the continued zero bound rates, there will be no deflation risks as monetary policies are hard pressed against the floor. Also, looking at the GDP projections for the 3rd quarter, there is room for growth and therefore hiking rate is the right step to do. All the Fed have to do is to release an unambiguous statement this week and stir the market a little bit, an outcome which can go both ways.
To the charts and it is evident that the daily support zones-marked by trend and horizontal lines, are still very important. On Thursday, I recommended a buy and Friday’s pullback back to the support zone provided a good buy opportunity for this commodity currency. Price action didn’t breach these levels and you can see how it reacted and reversed, check this out in the 15 min chart attached. I will recommend we continue with our long positions only adding to our positions at all oversold stochastics in the 15 min charts this week.
Today we trade as follows:
Buy Limit: 0.7270-80
SL: 40 pips, 0.723 on the down side
TP: 1:3 risk reward ratio.
Have a good trading day

NZDUSD 15 min chart-19.09.2016

Source: Dalmas Ngetich

NZDUSD Daily chart-19.09.2016

Source: Dalmas Ngetich

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.