Yesterday we saw a continued strengthening of the USD with it breaching the 20 4HR moving average and closing on the support trend line which is formed in the 4 HR chart. This was partly fueled with the good unemployment claims numbers which dropped to 247K from 253K and the Natural Gas storage capacity increasing to 7B from last month’s -3B. With these sorts of data, let’s see what happened on the charts:
Daily Chart Analysis
Technically speaking, this pair is on a decline with a convincing follow through of the two bar reversal pattern formed on Wednesday. There is a clear rebound from the upper BB and a declining momentum though the OBV remains somehow flat. We shall see if today the momentum is strong enough to break through the 20 day moving average and continue with the bear trend in the next week or if price will likely bounce off from the flexible support formed by the latter.
From fundamentals, there are no big impact news today from either economies apart from the Flash Manufacturing PMI set to be released at 1345HRs GMT and is projected to be at 51.9 from last month’s 51.5 showing that there is a slight expansion of the economy and overly, Purchasing managers are confident. This will provide future hints of USD strength and thereby lead to more bear momentum.
4HR Chart Analysis
For a month now price has tested support 6 times with resistance being tested half the times meaning that the likelihood of a break below the support line is increasing with each trading day passes. Considering all the nuances associated with this pair, this will happen sooner than later especially so considering how the momentum from daily candlestick is behaving. At the moment, price action is moving in from overbought regions of the stochastics and is supported by the decreasing volumes and momentum and price will likely break through today or next week. This is so if we analysis how the BB expansion is looking like, there seems to be an expansion leaning on the lower BB with a negative slope even from the 20 4HR moving average which will support our analysis.
15 Min Chart Analysis
The Asian session was somehow ranging and moved independent on volumes. OBV was flat but momentum made some good oscillation from highs to lows and at the moment, price is bouncing off from yesterday’s lows-a low which by the way reached after price moved 72 pips lowers from yesterday’s open. We anticipate, with Fibonacci levels that price will correct in the 50 or 61.8 levels today in the beginning of European or London session and that is when we should initiate our short and trade with the current bear trend. We should then aim a good risk reward ratio of 1:3 depending on the strength of the signal and pip range covered by then-The pip average of this pair being somewhere between 70-80.
Verdict: Sell at all highs.
Anyways, that’s it for today, have a pipful day.
One thought on “NZDUSD DAILY ANALYSIS FOR 22.04.2016”
Thank you Dalmas for the great article. It would be interesting if you would tell us how you use OBV in you analysis.