Hello Traders,

From the G7 meeting in Japan to sort of concluding
words from San Francisco Fed President John Williams, we are in for tough and
volatile time ahead. To begin with, the US economic condition is on an expansion
and since solid data are flowing in, we expect the Feds to hike its benchmark
interest rate albeit the political pressure streaming in. Interest rates has
been kept that close to zero because of the challenging balancing act in lieu
with the general global economic health with particular focus of Euro zone and
all other emerging markets. The probability of a rate hike during the June
14-15 live FOMC meeting now stands at 27% from 4% and no wonder Deutsche Bank
AG says this is just the begin of the greenback’s bullish run and I agree with
him. Let’s see what happened on the charts then:

Daily Chart Analysis

If anything, this pair seems to be on an upward
rise with the formation of a strong buy signal given that the past 3 trading
days had a bullish bias. Indicators are strongly swinging in from the oversold
region of the stochastics with a sharp rise in volumes traded in the past 3
days and a follow through on that doji candlestick that formed on 19.05.2016.
We shall watch to see what happens to the resistance trend line that is now
acting as our minor reaction zone around the 0.6820 region and if there is
formation of any reversal candlestick then we shall have to short from there
on.

Other than the New Zealand Trade balance for this
month-25Me from 117M on Wednesday and the Annual Budget release on Thursday
there are no major fundamentals expected. We shall however continue to pay
close attention on the stream of economic data from the US and see if there is
an expansion in the Quarterly GDP-0.8%e from 0.5% and hints of inflation when
the monthly Core Durable Goods Orders will be released on Thursday-0.3%e from
-0.2%. 

4HR Chart Analysis

The market on this time frame is on a descending
channel with price action approaching the upper channel, which is our
resistance trend line around the 0.6820 area- a region of strong resistance.
Volumes are being added in as seen with momentum following suit in the upward
direction. However, a look in the 1 hour chart shows price has overextended and
there is a whole candle stick which has formed outside the upper BB, this means
we have to short, and a fact that is supported by the stochastic which formed a
strong sell signal in the overbought region.

15 Min Chart Analysis

The Asian session was bullish and the 161.8
Fibonacci level was hit. We expect price to retrace further with 1:4 ratio,
follow price action that is happening on the 1 hour chart. Since there are no
major fundamentals today, we shall be looking to short at all highs.

All selling points will be all short signals above
the resistance trend line around 0.6820. However, don’t short if there is no
confirmation signal

Otherwise have a pipful day

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