Earlier today we had NZD Trade balance where it was obvious that meat and related products took a beating as exports fell by a seasonally adjusted 15%. This weighted in on the general export, considerations being that meat export is the second largest export from New Zealand after Dairy products, which fell by 4.5% end of September quarter. From this report we can also see that exports to china fell by 5.2% to $2.4B while those to US and Japan fell to $1.1B and $668M respectively. This had an effect on the NZD, which has been strengthening against the EUR throughout this month and stalling once it hit that support at 1.51.
Even though not much can be said about the Euro as it is very sensitive to any comments either from Britain, Draghi and to some degree the USA, it has been picking up some bullish moment across all quarters this week. Horizontal consolidation with a bullish bias has resulted in upticks in the dailies and this was accompanied by break above key resistance lines.
A look at this pair will show that there has been accumulation within a tight 700 pips in the daily chart in the last 4 months. It’s also shows that the 1.51 support line if checked with the stochastics is significant as price tends to reverse from this line with an oversold stochastics.
I would recommend for a buy today solely from looking at the fact that there is an oversold stochastics swinging in from the buy zone and over the past2-3 days, price action has been moving up and making lower highs relative to the lower BB.
So, trade as follows:
In the 15 minutes chart, it’s a good time to buy since there is a printed buy signal.
For day traders and general scalpers:
Stop Loss: 1.53
Take Profit: Trail your profits aiming for 1:3 risk reward ratio
For long term traders:
Stop Loss: 1.5100
Take Profit: 1.58 which is the top of this horizontal consolidation.
Otherwise, watch out for these fundamentals today:
Preliminary quarterly UK GDP at 0830HRS and US Core durable goods orders at NY Open.
Have a good trading day.