We are seeing a continued rally of the NZD against its US namesake and given the fact that a 5 month long term resistance was shattered yesterday, we shall be watching price action closely and relevant fundamentals from any of the Southern Pacific countries of China or Australia for any economic policies that might cause price to retrace back into the price action channel with the latest news being that of China’s PBOC moving the Yuan Reference rate to 0.35% against the USD, anyways, we shall wait and see if it will have any significant effect on the trend.
Weekly Chart Analysis
The 5 month resistance has been broken and price action is above the 0.69 levels at the moment. This seems to be the beginning of an uptrend in the weekly chart and bearing in mind that most traders are net long with this pair, we shall see a further positive volume change in the OBV which will increase the buy momentum. If price is maintained above the resistance line, initiate a buy in the 4 hour chart.
Yesterday, the EIA released the weekly Crude oil inventories and the data released of 2.3M barrels against the projected 3.1M barrels in inventories spelled good news to commodity dependant nations which by extension influence the NZD given its positive correlation with the Aussie. A short term rise in crude oil prices due to increased demand will further strengthen the Kiwi by association and therefore feed the rally.
Daily Chart Analysis
There are two important price action events that happened yesterday, the price closed above the resistance and it hugged the upper BB. This means that the buy wave is strong shown by the rising OBV and Stochastics and the expanding BB. From a technical point of view, the bulls prevail although today being the 4th day of the week and the daily pip range averaging 110 pips against last week’s 72 pips, we either expect a ranging market or reduced market volatility.
Earlier today, the ANZ Business confidence was released with general economic sentiment being at 3.2 from previous 7.1, meaning businesses are still confident of a bright business times ahead and a strong economy. We also have the US Unemployment claims scheduled at 1230PM GMT+3 where there’s an unemployment projection of 266K against last month’s 265K, increased unemployment will keep inflation down and therefore weaken the USD to our advantage. It’s important that we watch this closely.
15 Min Chart Analysis
The Asian session was choppy and moving sideways by all standards, with price action oscillating between the 100.0 and the 50.0 Fibo levels. The 50.0 retracement levels is forming a strong support in the 15 minute chart however, we shall have to wait for strong buy signals to initiate a good buy.
Today’s US Unemployment claims scheduled at 1230PM GMT+3 where there’s an unemployment projection of 266K against last month’s 265K in the London session will perhaps determine the general direction of this pair.