Hello Traders,
For the past 24HRs there haven’t been strong fundamentals for the markets to ponder other yesterday’s building permits and Housing starts which came in as expected at 1.15M permits for the month of June and an increase of 1.19M house starts representing 4.8% for the same month. This still represents some decent improvement after that tepid first half of the year. So for now we watch the charts for trend direction and look to make some decent entries. We also saw unchanged Diary prices coming as a relief and pause from the recent auction prices slump.
Technically and obvious to all chartists, the Kiwi has been taking a beating for the past couple of days and a look to the 4 HR chart indicate that last week 161.8 Fibonacci extension level has been hit and what is happening is, price action is moving in horizontally for now. I expect price to reverse the recent USD gains and trend back to the 0.71-0.716 zone in the European session before we see a resumption of trend. This reversal of trend will be confirmed only when the stochastics will be reversing from the overbought regions probably around the weekly 61.8 Fibonacci level or there about drawn from last week’s Hi-Lo.
The best strategy for now is to wait for that correction to end before entering sell set ups probably in the New York Session where we will be watching out for Crude Oil inventories projected at -1.3M barrels from last week’s -2.5M barrels.

NZDUSD 4HR chart-20.07.2016

Source: Dalmas Ngetich

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