Hello Traders,

Yesterday was a day of uncertainty
considering this being a commodity currency we were keen on what could be the
outcome of the OPEC meeting and well, nothing substantial came through apart
from Iran promise of continued production which by the way is almost hitting
the 4M bpd mark, so with this no progress was made and the glut will continue
unless a deal is struck to satisfy all members. We also saw the ADP Non-Farm employment
change print 173K from last month’s 166K representing 7K employment change in
the private sector, while this is not a very good indicator for gauging the
employment situation in the economy, many economist say it somehow has a
positive relation with today’s NFP data. Also of note were the weekly
unemployment claims which saw a reduction to 167K from last week’s 268K, a
change of only 1K. So with that said, employment will be positive but with
small gains as full employment has been reached-at 95%.

So to the charts:

Daily Chart Analysis

If the yearly Fibonacci is drawn from Hi-Lo
points, we can note that price is almost approaching the 61.8 level, a
confluence region with the 5 month resistance point and 15 pips away from the
support-turned resistance trend line. Momentum and volume is also increasing so
we should keep our longs and wait for NFP data today at 1230 GMT-projected at
159K from last month’s 160K. Of key, check the Average Hourly Earnings expected
at 0.2% from last month’s 0.3%. Any drop from last month has inflatory repercussions
as we know that as wages increases, spending goes north resulting to inflation.

4HR Chart Analysis

After yesterday spinning tops we saw price trended
higher and a buy signal was formed. Price action is at the 200 moving average
but whilst volumes are rising forming that positive slope, we should be keen on
what happens at the 62.8 and resistance level, that is our level of interest.

15 Minute Chart Analysis

The Asian session was positive especially after
the good ANZ Monthly commodity prices figures dropped at 1.0% from last month’s
0.8% and from the RBNZ projection, any inflation at 1.5% is good enough to
raise interest rates again, such data are of course upbeat and positive for the
kiwi. Yesterday’s high were breached temporarily and we are seeing a slight
correction with expectation of reversals at the 61.8 or 50 Fibonacci level and
that 200 moving average representing our region of support. Expect a tight
ranging market up until the NY open when NFP data will be released.

Probable Set-ups:

Buy Limit at 0.6805, SL-0.6775, TP-0.6860

Have a pipful day and a great weekend traders.

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