Yesterday was a trending day for this pair with the NZD moving a good 80 pip and closing above the 5 month resistance at 0.6875, with very supportive news coming from Australia that the investors are really confidence of the future economic conditions and it helped move this pair even higher. On other quarters, there is news circulating that if the US doesn’t raise the interest rate this June then there is little to no chance that it will raise then in their December meeting-the reason being that the Fed meeting will be just 6 days from election’s day. So, with news like this and the stubborn resistance line broken, we shall at least expect a medium term bullish run on this pair especially if the price surge higher above the resistance line today.
Let look at the charts:
Daily Chart Analysis
There is little chance that this will be a false breakout given the very convincing steady rise in volume and shift of momentum after the resistance was broken. The price rallied from the 20 day moving average and bounced off from the support trend line as shown from yesterday candle and today in the Asian session, the resistance was broken. We shall expect this rally to continue for the next few days especially if the fundamental turns out to be good.
I will reiterate yesterday’s comment that tomorrow CPI will decide the direction of trend for the next couple of weeks at least before the next major economic news are in the tunnels. In the meantime, we shall be keen to look today’s less impacting monthly import prices to be released at 1230HRs GMT+3 which is projected to rise from-0.3% to 1% meaning people are spending more on imported commodities and thus feeding on all the important inflation and later on today at1800Hrs GMT+3 the Federal Budget balance projected at -106.5B from -192.6B
4 HR Chart Analysis
One thing is clear in this chart, price action is indicating a bullish NZD and the resistance line is now our support-as shown from the last 3 candle sticks, price couldn’t breach the resistance line. There is an upward momentum from the overbought regions and price action is beginning to hug the upper BB which is also beginning to expand.
We shall be looking at the US Retail Sales and CPI news and see how it affects price action and if news turn out against the much anticipated good news for the US, we shall be adding to our buy position in the course of the week.
15 Min Chart Analysis
Yesterday price action moved 80 pips and retraced to the 61.8 Fibo levels in the late New York Session before rising steadily in the Asian session. Price might retrace to the 100 or to the resistance in the course of the day and accelerate again and depending on the indicator combination, we shall only initiate buy positions at the overbought regions and target a good risk to reward ratio of 1:2 given the average pip range of this pair.
Verdict: Buy at all lows