NZDUSD intraday price pattern is bearish against .7640.  The pair has dropped below a support line drawn off of the September and October lows.  The underside of that line is potential resistance at .7342 today and increasing 15 pips per day.  The decline from .7640 is impulsive and the rally is corrective and possibly complete at .7316.  Additional resistance would be .7360/75, and .7410/45.  A break under .7100 exposes .6850.   

Subscribe to This Analyst

NZDUSD is consolidating within a short-term triangle formation, with resistance at 0.7270 and support at 0.7215, and I'm looking to buy a break higher or sell a break lower. That said, with a rising trendline going back to May holding as longer-term support at 0.7115, NZDUSD remains within an uptrend. A drop below there creates more bearish potential.

Subscribe to This Analyst

I continue to favor staying short 'risk', and I maintain my short EUR/USD and EUR/JPY positions, with targets set at 1.45 and 131, respectively. I think the post-NFPs tumble in equities will continue into the week ahead and, as such, I feel confident in the positions.

Subscribe to This Analyst

I have had some success with the ranges that the commodity bloc-based majors have produced this past week. Most notably, my analyst pick from last week for a short USDCAD setup would hold the descending trend of highs and play out relatively quickly. More recently, the short-term (and risky) congestion outlined in Thursday's range trade report would find a supportive fundamental backdrop to quickly drive an open position to its first target. The wedges and horizontal zones of chop that have developed over the past few weeks is still strong with the Canadian dollar-based major as well as its Australian and New Zealand counterparts. However, just like underlying market sentiment (which has stalled), these pairs will have to find direction sooner or later. And considering the consistently high levels of volatility and bolder efforts at defining early (false?) breakouts on long-term trends; a significant turn looks as if it develop sooner rather than later.

In looking for breakouts from any of these pairs, the primary catalyst is almost certainly going to be risk appetite. This is a sweeping economic driver that will likely force all three at the same time; so it is best to pick and choose rather than leverage exposure by trading all three in the same direction. However, AUDUSD, NZDUSD and USDCAD each have their own unique fundamental and technical appeal. USDCAD is somewhat buffered due to its close economic links while NZDUSD and AUDUSD are freer to repond to sheer speculative flows. For USDCAD, their is a descending triangle formation with the falling trend (8/17 to 9/3 to 9/28 to 11/2) now at 1.0850 and pivot support at 1.0600/20. NZDUSD managed to push below its steadily rising six-month trendline so the short-term wedge that has develoepd this past week can quickly find momentum. In contrast, AUDUSD has maintained its consistent rising trend for the year (now at 0.8950); but congestive price action and a larger resistance at 0.93 lend the sense that a break is approaching. I don't want to take a predefined bias for either a dollar bullish or bearish break; but a dollar rally has the greater room to run. I will look for techncial (a close beyond one of the aforementioned levels) and fundamental (a defnitive shift in sentiment) to confirm entry on whichever position looks best at the time.

Subscribe to This Analyst

Last week, USDCAD conclusively broke out past resistance at the upper boundary of a falling channel that had guided prices lower since early March. Prices have now pulled back to re-test this juncture and are starting to show signs of returning bullish momentum above horizontal support at 1.0630. I will look for a strong bullish close on the current session to follow the back-to-back Star candlesticks now sitting at support as confirmation to enter long at the beginning of next week.

Subscribe to This Analyst

My long USD/CAD trade last week was triggered by a move above 1.0785-38.2% Fibo of 1.1722-1.0206 but subsequent weakness would stop out the position. The pair is looking to trade back above the resistance level as weak employment figures from Canada and the U.S. is weighing on risk appetite. The prospect of weak domestic spending at home and from its main trading partner should lower the growth expectations for the commodity driven economy. However, I am leery of broader dollar weakness if the dismal U.S. employment figures impacts the outlook for a U.S. recovery. Therefore, I will wait again for a clean break above the level with the 100-Day SMA at 1.0936 as my initial target, followed by 1.1125-8/17 high. If greenback weakness accelerates then I would change my bias and look to take a short position with a fall below the 20-Day SMA at 1.0537.

Subscribe to This Analyst