Yesterday the much anticipated FOMC meeting minutes was released and yes, it was very positive to the USD. To begin with, Fed officials were stating their points across and letting us know that the Fed could hike interest rates as early as June and therefore investors and traders alike should not make any assumptions. They further went on to say that though there is a general improvement in the economic conditions in the US, the global outlook was not that good with particular events posed by the June 23 BREXIT vote set to take place being a particular concern. In my opinion, I think this June Rate hike is more like a done deal because according to expectations the Feds were supposed to raise interest rates at least twice this year and this is what is going to happen considering all the positive development in the labor market conditions at 5% unemployment rate and the increasing inflation even if it is still below the 2% objective-we saw a tremendous growth in April release, registering the highest reading in 3 years.
Now let’s look at the charts:
Daily Chart Analysis
From this chart we can confidently say that we are on a bearish run with reference to the weekly chart which is strong bearish with momentum swinging in from the overbought region and as early stated, price action is bouncing off from the 61.8 Fibonacci Level in the monthly chart. It is clear that the 5 month resistance line is very strong and coupled by the fact that the 0.685 price level is an important resistance zone, we can see the influence of the 20 day moving average which has proofed to be an important support and resistance line we need be-check last month’s behavior when it was a support zone, now it is a clear flexible resistance after it was broken through on 04.05.2016.
We shall continue to hold to our shorts and sell at all highs in the 15 minute time frame if you are just joining in the party that is and since there are no other major economic news from the both economies other than the Philly Fed Manufacturing index -3.2e from April’s -1.6% with Unemployment claims 276Ke from last week’s 294K. All these will be released at 1230 GMT when the NY Session opens.
4HR Chart Analysis
To be clear we are now trending in last week’s low and that neckline will be our temporary support. We have seen that both volume and momentum are on a downtrend but of note is the lower BB hugging by the candlesticks. If the neckline is broken through, then buy when price action attempts to close above the neckline.
15 Minute Chart Analysis
The Asian Session was bearish because of the Australia’s labor condition release which saw a continued decline and the effect was felt on the NZD which plunged further following the FOMC meeting minutes. We shall continue to hold our shorts or if you not in the trade already then look to short at every price correction accompanied by good indicator combination. Price action might continue to bounce around the 100 Fibonacci level or might correct to the 61.8 level and if it does that then initiate a sell, wait for good selling opportunities especially in the NY Session.
Have a pipful day.