Hello Traders,

There are noticeable reversals being made in this pair with news after news flowing in and influencing it in a major way. Let’s start with the JOLTS news which was released yesterday from the US. First things first, even though these kind of news have a one month lag, it is important because it provide a general outlook on employment gains and loss for the year and as things turns out, it’s good news because there is a net yearly employment gain of 2.8 million with really good data deduced from the release. For any healthy economy there must be a reasonable quit rate which stood out at 2.1% this meant that people are finding good opportunities elsewhere-with layoffs and retrenching at 1.2%.  Job quit rate and all layoffs was absorbed with job opening which increased 3.1% that represented a hike to 5.76M compared to February’s 5.55M. This by all means meant good data and strengthening USD not before the RBNZ Financial Stability Report with Governor Wheller on the wheels. General projection was bleak for this pair not until the NZD spiked 70 pips in the NY Session immediately after the news. RBNZ is aware of what it did when it reduced its interest rates to encourage borrowing, this was well grasps by the housing sector which is booming and even though measures such as LSR and native ownership of property was encouraged, risks are still high and loans at risk is close to $2B and this is not even made better with the current dairy product stock in US inventories at its all time high, meaning that farmers might not even break even when we look at the current prices of $3.3 per Kg. In a nut shell, RBNZ remained cautious but we shall have to consult the charts for the entire outlook:

Weekly and Monthly Chart Analysis

NZDUSD Monthly Chart-11.05.2016

Monthly Chart

NZDUSD Weekly Chart-11.05.2016

Weekly Chart

Looking at the Monthly chart, there is a double bar reversal at the 50.0 Fibonacci level which means that when compared to last year, price action has corrected 50% and it means one thing, prices are likely to fall down with the next stop being at the 100.0 Fibonacci level to the downside. In my opinion, this seems to tally with what is happening in the weekly chart because, both the stochastics is sweeping in from the oversold region with OBV showing a clear negative slope. There was also a reversal candle stick which formed and bounced off from the upper BB. Two candle sticks before that, the formation of an inverted hammer showing increased selling pressure. If price action continues and closes higher that the resistance line, we shall then nullify this projection but if price trends lower, then it will be wise to continue with our shorts.

4 Hour Chart Analysis

NZDUSD 4HR Chart-11.05.2016

NZDUSD 1HR Chart-11.05.2016

1HR Chart

Back to the 4 Hours chart, price action is trending higher and after the FSR report, price has been trending higher with support coming in on the behavior of the OBV and Stochastics which are flowing from the oversold region. We shall have to look on how price will behave on the 100 Fibonacci level and particularly look at the 1 hour charts where there is a confluence-both the 100.0 drawn from last week’s 4 hour chart HiLo and last year’s HiLo 61.8 Fibonacci Level coincide and acts as our resistance zone at the moment.

Other than that, let’s watch the Crude Oil Inventories set to be released at 1430 GMT projected at 0.1M from last week’s 2.8M, then we see how the 10 Year Bond auction and check how they yield-these things have a thing or two on the interest rates before checking on the Federal Budget Balance set for 1800GMT where we see a possible surplus.

Otherwise, that’s it for today. Have a pipful day.

3 thoughts on “NZDUSD DAILY ANALYSIS FOR 11.05.2016”

  1. Nick T says:

    You’ve got great articles. Would you be bearish on NZDJPY?

  2. Dalmas Ngetich - FOREX.TODAY says:

    thanks nick, I would be short NZDJPY, resistance trend line in teh weekly and monthly charts remain unbroken and when we check the 1 hour time frame, stochastics are from the overbought

  3. Daniel Chan - Forex.Today says:

    Thanks Dalmas , informative point of view .

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