Hello Traders,
For the past 24Hrs we have been observing a strong USD coupled with fairly good news trickling in from the US. Fundamentally, the yield spread of US treasuries is making a turn over from historical low levels at less than 1% perhaps maybe from the anticipated monetary policy which is always on the table and could be unleashed any time. To put things in perspective and paint a rosy picture of the USD, the TIC-which measures foreign investment of US securities and bonds increased by $41.1B last month showing people are really confident of the economy. In contrast to the US and the Fed, yesterday I mention how the RBNZ-are really trying to rein low inflation, bullish NZD and heated housing market by probably cutting rates and spur the much needed inflation which isn’t getting past the 1% mark. Any suggestion of a rate hike will probably see capital flowing back to the US, Euro, Treasury Bills, German Bunds and other safe havens at the expense of commodity currency. This is precisely what is happening if we look at the charts as the NZD took a beating in the late NY session an early Asian session with price action trending below the 0.705 mark which is also our support level.
Technically, I expect price to rebound back in the European session before tumbling again in the NY session and probably trend even lower in the week to come towards the 0.60 level which is the 100% yearly Fibonacci level.
If you were late, don’t short now instead wait for a retracement in the 15 min chart and sell as follows:
Sell Limit: 0.707
SL: 0.71
TP: Trail Profit to victory at your discretion
Have a good trading day.

NZDUSD 15 Min Chart-19.07.2016

Source: Dalmas Ngetich

NZDUSD Daily Chart-19.07.2016

Source: Dalmas Ngetich

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