NZD/USD Forex Technical Analysis for June 14, 2016
Technical Analysis – The NZD/USD pair went back and forth during the course of the session on Monday, but ultimately ended up forming something akin to a shooting star. The shooting star sits at the 0.7050 level, and that area begins a significant amount of support all the way down to the 0.70 level. Because of this, even if we break down below the bottom of the shooting star I would be hesitant to sell until we broke down below the 0.70 level. On the other hand, if we break above the top of the shooting star for the session on Monday, I believe that would be a very strong sign and buying would pick back up.
Keep in mind that the New Zealand dollar is very sensitive to the commodity markets, and as a result it’s likely that the markets will continue to be very volatile as Marty markets are been influenced by quite a few different things at the same time. After all, we have to worry about whether or not the global economy is even going to grow, and that can have an effect on demand of commodities, but at the same time we have the US dollar with the specter of the lack of interest rate hikes pushing the value of the dollar lower. At this point in time, I think there’s a lot going on, so therefore it’s going to be very difficult to trade this market. However, there will be moments where momentum builds up in one direction or the other, and as a result I think that is how you have to play this market, based upon momentum. That is why I have 2 different scenarios that I’m willing to trade. A break above the top of the shooting star would of course be a sign that we were breaking above the resistance. That of course would be very bullish, and could offer an opportunity. You can also say that a break down below the 0.70 level is reason enough to start selling as it would be a support level giving way.
In other view point – Buy @ Demand zone
Bias Buy by uptrend price react on demand zone But might be wrong cause price has dripped nearly demand zone : indicate that and order has been deplete I is strong revisit momentum is low
In other view point – NZD/USD awaiting for a decisive break-through descending trend-channel
The NZD/USD pair remained well offered during Asian / early European session, with the pair just managing to hold above 0.7025-30 last week’s high resistance break-out level.
With a slew of central bank monetary policy decisions this week, market participants have turned cautious and are moving away from riskier asset classes like equities and commodities, driving commodity-linked currencies, like kiwi, lower.
Moreover, global risk-off sentiment, as depicted by a sell-off in Asian equities along with weak opening for European equity markets and bearish tone surrounding oil prices, is also seen weighing on the NZD/USD pair.
Going forward, the release of UK inflation data during European session and US monthly retail sales later during NA trading session will be in focus on Tuesday and could drive risk sentiment in the forex market.
From technical perspective, the pair is oscillating within a short-term descending trend-channel formation on hourly chart, with the trend-channel resistance around mid-point of 0.7000-0.7100 handle. A convincing strength above descending trend-channel would pave way for further near-term upward trajectory for the pair.
Technical levels to watch
On a sustained move above 0.7050, the pair seems to immediately jump to Monday’s high level of 0.7080 ahead of 0.7100 handle, above which the pair seems all set to extend its upward trajectory back towards RBNZ led swing high resistance near 0.7145-50 zone.
On the flip side, in ability to clear the trend-channel resistance and a subsequent break below 0.7030-20 support seems to drag the pair towards the descending trend-channel support, currently near 0.6990 level, which if broken now seems to trigger a fresh leg of corrective move for the pair.