Psychologically, traders and investors everywhere
are being prepared…rate rise is coming only if economic conditions are
improving and of course, after the Brexit voting takes place, after June 23
that is at least what St. Louis Fed President had to say yesterday and
reiterating what Yellen said on March. In my opinion, this coming NFP will
provide some clear glimpse on the general labor market condition with
unemployment at 4.9% and that is what is meant when the economy is almost at
full employment. We shall wait for today’s personal spending -0.7%e from 0.1%
last month and obviously the CB Consumer confidence at 96.1e from 94.2 in
April. That strong data from US should only strengthen the greenback but we are
seeing the contrary on the charts, NZD and all major currencies are gaining ground
and especially today in the morning when monthly building consents was
released-printing 6.6% from -9.7% and ANZ Business confidence at 11.3 from 6.3
last month. It showed that the construction sector was striving and businesses
in general were confidence in their future prospects.
So what exactly happened on the charts after the
If you are keen, there is formation of a doji,
morning star candle stick –wholly formed below the support trend line and
supported by the indicators which are reversing from the oversold region of the
stochastics-check out the OBV too it formed a positive gradient over the past
24 hours. These indicator combinations was followed through by a strong
reversal candlestick in the Asian session which saw price reverse strongly from
March’s lows. A Fibonacci retracement drawn from January lows to April highs
also shows that this low is a confluence with the 61.8 level, a key price
reversal level. We shall therefore look to buy from all lows with our SL moved
to break even when price is around the earlier 5 month resistance line at
As earlier stated, the only crucial fundamental is
the CB consumer confidence at 1400 GMT and this will influence the green back
in one way or another so it is crucial to wait for this data.
hour Chart Analysis
Price action is almost at the resistance trend
line and indicator combinations are signaling a strong buy. Price breached the
middle band of the BB strongly and if the next candlestick closes above this
band look to buy with all fundamentals in mind.
Minute chart Analysis
Coupled with the good news trickling in from New
Zealand and Australia, the kiwi gained massive grounds and rallied from 0.667
lows hitting the Fibonacci 161.8 extension level on the upside. Price is now
trending lower with expectation of price reversal in the 100.0 Level,
representing yesterday’s highs. Look to buy from all lows today with the rule
of thumb being initiation of long trades only when the indicators says so in
the European and NY session when volatility is high.
Have a pipful day.
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About The Forex Analyst
I have been trading Forex and commodities for the past 3 years. [email protected] for further discussions.