Well, yesterday you all saw what happened on your charts, with the NZD gaining 88% against the USD and moving a massive 144 pips against the daily average of 72pips-that is the data from the previous 2 weeks other than that bull when the FEDs decided to keep the interest unchanged. Yellen overall message remained cautious looking at the general global economic condition and China deflation and lack of growth. Its mandate however shifted from the dependence of employment data which determined the Dollar barometer readings and focused more on inflation which they intend to keep it at 2% in the long term.
Weekly Chart Analysis
As noted before, the resistance which remained unbreached from mid last year was broken through briefly yesterday after that uptrend. We however remain neutral until the price closes convincingly above the resistance and that is when we shall initiate a buy and target a cool 700 pip upto the 0.77 region. On the flip side, if there is a reversal and the price closes below the support trend line we shall target the 0.60 regions with a favorable risk reward ratio of 1:3
There is no major economic news from New Zealand but there are some crucial ones from the USA which will determine the long term outlook of this pair. After Yellen’s speech which in my opinion kind of triggered off a short term outlook for this pair, we shall be focusing on the Crude Oil inventories data and the employment stats which is set to be released today and on Friday.
Daily Chart Analysis
Yesterday, the price action closed strongly above the 20 day moving average and followed through the two bar reversal which was initiated in the beginning of the week. The OBV and Stochastic are providing bullish signals and if there is a breach and price closes above that 5 month resistance line which developed from mid October, we are in for a bullish run especially if today’s candle stick hugs the upper BB. There is some price rejection from the Asian session with that hanging man developing.
Today’s building permits from the New Zealand indicated that there were more building permits sought and it jumped from -7.8% to 10.8% during the month. This is positive for the Kiwi. Other news which we expect volatility during the New York session is the ADP employment change and the Crude Oil inventories-forecasts which economists are pointing for a weaker USD.
15 Minute Chart Analysis
In the Asian Session, the price closed 20 pips above yesterdays high and it was quickly rejected evident from that bearing two bar reversal and from the negative slope of OBV and stochastics moving from the overbought conditions downwards. At the moment, it remains flat at the 100.0 retracement levels. It will be prudent to wait for good signals to initiate a buy from the oversold regions.
At 1215PM GMT+3 ADP employment change will be released with a forecast of 195K from 214K, meaning less people were employed in the private sector and therefore negative for the USD and later, crude oil inventories showing that there is a demand of oil-from 9.4M to 3.1M and it will be released at 300PM GMT+3