Today we discuss matters oil, Cad and Norwegian Krona. You know these guys are pretty much sensitive to any sort of intervention or measures taken by OPEC and Russia. Well, yesterday the 3 day meeting in Algiers begun and news filtering in is that there has been a potential agreement by OPEC members to freeze oil production to 32M bpd down from 33M bpd. This move will obviously prop up the ever fluctuating oil prices and by extension move the above mentioned currency pairs. While this is good news, it’s all hot air unless there is strong conclusive statement and backing by Putin and his delegation. Also, some comments from Iran representative on this matter is also important, remember these guys gave a wide berth to the Qatar meeting last time and the CAD, Krona and Rubol tanked. Cementing Cad resurgence was yesterday’s crude oil inventories which came in against investors expectations and showed that there was a deficit of 1.2M barrels.
To the charts now and since we are not subscribing to rumors and innuendos, we shall look for solid reasons to go either direction depending on the technicals and most importantly from region of support or resistance with a little bit of support from Fibonacci for a good recommendation. In my view, and from my last post, there have been a couple of bear traps in recent times-check the 02.09.2016 and 21.09.2016 reversals bar to get my view of things. This to me means selling pressure and look, this is the 4th time in 2 years where price action has retested 0.96 price level, and the difference right now is that we have that overbought stochastics turning from resistance levels with last week’s inverted hammer cementing claims.
Our plan for today and the next couple of weeks is to short this pair at all highs until there is a reversal in the weekly chart. Mark you, the kiwi is weakening after a year of causing damage. This is how our trade should go if things go as planned.
Sell Limit: 0.955-0.958-this is a region between 61.8 and 23.6 Fibonacci level and the 4HR and Daily chart resistance line. Initiate a short with any move testing these zones accompanied with a stochastics sell with a confirmation candle in the 15 min chart.
SL: 40 pips from your short price level. So this should be somewhere between 0.959 and 0.963
TP: Trail, if it goes down, it would be a nice ride. So I recommend a trailing stop.
Otherwise, continue shorting the NZDCHF and NZDUSD while buying the GBPNZD as we wait to see today’s US final GDP 1.3%e from 1.1% at NY Open. Buy the Norwegian Krona too, check the attached chart.
Have a good trading day.