Hello traders,
Earlier in the Asian session, the kiwi took a beating and it sunk as far as 0.7090 that’s about 60 pips from yesterday’s close. This was expected, with real estate funds being halted and the BOE relaxing its regulations thereby allowing banks to lend out more, there was a capital flight to safe haven currencies such as the USD, the Yen, German bunds and Treasury Bills. This new relaxation from the BOE and announcement of resignation of Cameron saw the Pound tumble further and it surely became a reality on the situation that was to come after Brexit. Fundamentally, this uncertainty will be accompanied by the strengthening of the USD.
From yesterday, the sell limit was hit and price continued to trend lower and lower. We shall expect this to happen especially after yesterday’s news-the GDT index at -0.4% and it is the second consecutive time where price has been on the decline. New Zealand being a dairy exporting country will be adversely affected by falling prices with the farmers especially not breaking even. If prices fall further, easing and rate cuts will be inevitable as earlier predicted.
Today’s NZDUSD Trading plan will be all follows:
After that strong bearish move in the Asian session, we shall expect price to consolidate in the European session and later in the NY session, we shall have the FOMC minutes and that is when some volatility is expected with price moving lower according to my analysis.
We shall be relying on our indicators in the 15 Min charts and selling when the stochastics are in the overbought region- and if prices will be falling in relation to the upper BB in this time frame then that will be a particularly good sell signal. We have already seen that price broke yesterday’s lows and hit the 161.8 Fibonacci extension before reversing, our expectation will be price action consolidating between the 100 and the 161.8 Fibonacci extension before 1800 GMT today.
We shall trail our profits and if price action sinks past the 0.705 handle-a very strong resistance and support level as we have seen in previous analysis, then we shall expect the kiwi to tank even lower.
Have a good trading day

4HR chart-06.07.2016

Source: Dalmas Ngetich

15 Min chart-06.07.2016

Source: Dalmas Ngetich

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