This is the first trading day of the month, and
while historically this month don’t bear much pips, this won’t be the ordinary June
as painted before-we have the Brexit voting taking place and then the
probability of the feds raising their fund rate this coming July or June. But
the most important thing happening now is the Brexit voting and yes, it is
causing a lot of volatility and by extension it will affect the greenback
because if it did happen then there will be massive demand for the greenback
and a massive devaluation of the cable. Data trickling in from the US paints a
positive picture and is in line with the positivity which Yellen
mentioned-positive data will trigger rise and this came in when the Personal
spending rose the highest recording a 1.0% increase beating expectations of
0.7% with citizens spending their income most on purchasing automobiles buoyed
especially by the high housing prices and a strengthening labor markets. Earlier
today we also saw a gain in quarterly Overseas Trade Index to 4.4% from -2.0%
last quarter mostly due to cheap import of oil-as we all know prices of oil has
been on a decline.
Now to the charts:
Daily chart Analysis
The past month price has been making as series of
lower highs with the 20 day moving average being a reliable flexible resistance.
Today however, price closed above the resistance and followed through the
previous morning star doji which formed on 30.05.2016. If price manage to close
above weekly R1 pivot point and above last April’s lows, then our next target
will be the resistance zone at 0.685. We shall continue to hold our longs as
both OBV and Stochastics are also swinging in strongly from the oversold region
and candlesticks moving in from the lower BB.
Fundamentally, we should only watch out for
today’s ISM Manufacturing PMI from the US expected at 50.5 from 50.8 recorded
in May. This will be released at 1400 GMT, check out the construction
spending-50.5e from 50.8 and manufacturing prices-58.0e from 59.0 at the same
time. NZD GDT Price index will be released at a tentative time-usually around
1400-1430 GMT, any positive change of dairy product auction prices will cause
the NZD to Rally.
4HR Chart Analysis
At the moment, price is at the resistance trend
line having broken and closed above the minor resistance zone expected at 0.675
zones. Both Stochastics and OBV are strong and moved from the oversold regions.
There is a possibility that last week’s high will be cleared and if it isn’t
price might retrace to 0.675 which is has
been a major support for the past 3 weeks.
15 Minute Chart Analysis
The Asian session was slightly bullish with price
action breaking above last week’s highs and it appears that price was rejected
strongly. We are seeing a retracement towards the R1 Pivot level which
coincides with the 23.6 Fibonacci and also towards the 31.8 Fibonacci levels
which coincides with weekly resistance at 0.675. It price fails to break
through this level then our target will be the 161.8 Fibonacci level on
extension. We should look to go long today so long as there is good indicator
combination in the oversold region of the Stochastics in this time frame.
Probable buy zone will be at:
0.6765, SL-0.6735, TP-0.68005
0.675, SL-0.672, TP-0.68
a pipful day.
About The Post
About The Forex Analyst
I have been trading Forex and commodities for the past 3 years. [email protected] for further discussions.