To put it the way it was, yesterday there were no movement at all, with price action failing to breach Wednesday high. As it can be seen, though data from the US were disappointing with weekly unemployment claims coming in at 294K against 277Ke representing a 20K increase from last week’s number and according to government statistics, this represented a seasonally adjusted 1.6% unemployment rate by April 30th. This was a revision and was marked up from 1.5%. We also saw that import prices didn’t increase much as anticipated-it was forecasted at 0.6% change in import prices but this came in slightly below that at 0.3% an increase which was purely because of the higher oil prices-US is a net oil importer. Despite these small inflatory signals, it was cushioned by the increase in export prices after remaining flat for the past two month-it increased to 0.5%.
Earlier today we also saw that quarterly retail prices for New Zealand dropped to 0.8% against December’s 1.1% with consumers preferring to spend on electrical and electronic equipment. Now with these data, let’s see what happened on the chart:
Daily Chart Analysis
Fundamentally speaking, and if we check the news from the US, it is generally not that upbeat but this didn’t stop it from gaining ground against the NZD. From the charts, we see that there are no major movements with price action rebounding at the yearly HiLo at 61.8-50 Fibonacci levels which by the way coincided with the 0.687 region-the 5 month resistance line. In my opinion, this represents a very strong resistance point as long as price action remains below it, then our shorts remains valid.
What is important for today is the PPI and retail sales data set to be released at 1230 GMT, we shall have to watch keenly what the core retail sales will print because it will point out the direction inflation is taking and if in extension the inflation mark-2%, the ideal number for Feds to hike interest rate. Both PPI and Retail sales are estimated at 0.3% and 0.6% respectively.
4 Hour chart Analysis
Technically, this pair is correcting and the 2 month 4 hour support trend line acting as our new resistance. As observed, there is a slow but clear Double Tops on course and it corresponds to Monday opening when price breached the 4 hour support trend line. Momentum and volumes are also decreasing on this time frame as shown by OBV and Stochastics and therefore, if you trade this pair, it is wise to sell at all highs from the 15 minutes time frame.
15 Min Chart Analysis
Price action in the Asian session was purely bearish and after the formation of that inverted hammer which closed outside the upper BB and clearly formed in the overbought regions of the Stochastics, it formed a clear sell signals. At the moment, price is reversing from the oversold region with increasing volume and momentum as indicated by OBV and stochastics. Price will likely strike today’s high which is at the 38.2 Fibonacci level or just below it at 50.0 levels before a probable reversal. If that happens, then place your TP level at the 161.8 Fibonacci level before having a good weekend.