Things did not turn so well in Asia this weekend, if we consider lackluster results coming out of China. In Forex currencies, this should translate into bearish pressures over currencies whose economies are net export dependent relative to mainland China, namely AUD and NZD.
Yet, looking at the AUDNZD cross, the question is quite clear: Which direction would this pair take, considering their tethered dependence on the broad Asian market?
The answer to this question might come from their respective central banks.
Recently, RBA Governor Glenn Stevens mentioned that his views on the present high currency rate remains unchanged from comments he had made back in December 2013, and now states that "$0.85 would be closer to the mark than $0.95".
In contrast, RBNZ Governor Graeme Wheeler more than hinted at a rate hike, saying: ""It is becoming unnecessary to maintain the current degree of monetary stimulus" in late December 2013. In fact, more recently, he stated that "The Bank expects to start this adjustment soon."
Could this hint be any more explicit?
For the Forex pair, this would have the effect of a net BEARISH pressure, which really falls in line with the predictive analysis and forecasting we produced earlier - See the AUDNZD chart here: tradingview.com/v/pMU3TCeA/
Now, looking at the NZDUSD chart on its own, any cash rate increase from RBNZ is expected to push this pair up, and from a technical standpoint, one has now to wonder: To what heights?
TECHNICALS:
As of today (08 MAR 2014), our price-independent, fundamentally-ignorant predictive and forecasting system has favored a BULLISH upturn already, churning out the following targets:
1 - One moderate-probability target: "TG-1 = 0.85950 - 08 MAR 14"
2 - One low-probability target, TG-2 = 0.86656 - 08 MAR 14"
and
3 - One distant TG-Hi = 0.94565 - 08 MAR 14, with a probability that remains quite low at this point.
PATTERN ANALYSIS:
The pattern trader might already recognize that the historical structure high offers a handle for a potential Butterfly as its Point-X, with 1.414 x XA lining up closely to our "TG-Hi = 0.94565 - 08 MAR 14" loftiest target. A dashed line from Point-A also suggests a median momental line, pacing a wounding price around it during its potential ascent.
A lower target sits down at TG-Lo = 0.57337 representing a potential Janus Pattern, which would potential come to existence if and only if TG-Hi = 0.94565 - 08 MAR 14 got hit. So, we'll keep it ignored in grey for now, but for the record.
PS: If you liked the analysis, feel free to give it a "Thumb Up" and pass of a friendly referral to friends interested in occult market mathematics and hidden geometries. All targets generated are defined by non-price means, and confirmed by either proprietary patterns (Euclid, Janus, Great White, Deep Shark), or other well known patterns. However, we concentrate mainly on Shark, 5-0 and occasional Bats, to complement our predictive analysis and forecasting - Cheers, David Alcindor.
----------------------------------------------------- Get signals, analyses and forecasts on Twitter Alias: @4xForecaster -----------------------------------------------------
Disclaimer: Forecasts, analyses and directional opinions generated herein are for educational purposes only and are not trading recommendations. We trust that you will do your own due diligence first, then seek professional advice from a licensed professional, then enter the market at your own perils - David Alcindor - TradingView.com Alias: 4xForecaster
Comments
manijeh.kazemi.33
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thanks for analysis I wish you luck
4xForecaster
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* * * RATIONALE FOR NZD RALLY IS BASED ON LONG-TERM PERSPECTIVE, IRRESPECTIVE OF RECENT BEARISH CHINESE DATA - Read on ... * * *
Friends,
This chart is a re-post of an original, in which a typographical error in the title had to be correct, and it could not be done without having to create a second link - Here is a link to the prior chart:
- tradingview.com/v/n2ggbf7O/
I am sharing that link defensively, since shortly after I posted the WEEKLY chart, I received an abrasive comment from a trader who felt he had to rate the analysis and berate the author:
@xxxxx - "3rd class analysis...China has huge impact on NZD...don't know why you ppl post this kind of dump technical chart"
I thought this represented a great opportunity to also repost the justification of my analysis, since all the data I was pulling was and remains supported by fundamental news, whose development are likely to affect the chart in a much broader timeframe than the immediacy, which that negative comment may have considered, as indeed and quite rightly, NZD is expected to fall in the most immediate terms.
Following is my reply and rationale for a potential long-term bullish view of the NZDUSD, backed by developing fundamental news and supported by my self-generating predictive analysis and forecasting system:
-------------------------
David Alcindor:
@xxxxx - Appreciate your input here, However, this is a WEEKLY chart, and while an interim decline is anticipated, the analysis is also looking at a much broadly inclusive fundamental picture.
Indeed, I clearly stated that both NZD and AUD are tightly dependent on China. However, RBNZ has made repeated comments back in December and January about "imminent rate increases", and the analysis was taking this potential scenario into account.
The analysis here is based solely on that fundamental news, which may or may not play as a significant backstop against the recent bearish (and yes, bearishly impacting upon NZD too) Chinese data.
David Alcindor
------------------------
One aspect of the rationale I should ahve done was perhaps to offer the sources of the news, so here is the fundamental basis that I used to further support my predictive analysis and forecasting:
RBA RATE POSITION:
1 - 03 Mar 2014: RBA calls its exchange rate historically "high": "The decline in the exchange rate seen to date will assist in achieving balanced growth in the economy, though the exchange rate remains high by historical standards,"
- Source: efxnews.com/story/23141/rba-keeps-rate-unchanged-reverts-exchange-rate-jawboning
2 - 06 MAR 22014: The RBA says regarding best exchange rate level: "I don't think the extent of our knowledge about what's correct is that good, but I did think ($0.95) was rather too high. I thought $0.85 would be closer to the mark than $0.95" (as of this week-end, rate sits at $0.90668)
INFLATION RATE:
- TOO HIGH PER RBA; RBNZ HAS OVERHEAD ROOM:
Also, another fundamental piece left out of my supportive commentary relates to the inflation rate affecting both sovereign economies. Indeed, while both central banks have a mandate to keep their respective inflation rate within the same 1-3% range, RBA is under greater pressure to decrease it compared to RBNZ's.
1 - Australia's inflation rate is currently at 2.7 (0.3 percentage points from max)
versus
2 - New Zealand's inflation rate, at 1.6, (a wide 1.4 percentage point from the max)
OVERALL:
I hope that above comments and supportive references offer you a fair explication of the rationale upon which I based the BULLISH outlook of the NZDUSD (here: tradingview.com/e/cvaM8gr8/ and that it helps you see why BEARISH the predictive analysis and forecasting done on the AUDNZD (here: tradingview.com/e/5OKs9iez/ may also use that fundamental information as added reasoning for that wide timeframe perspective and directional bias.
Again, I appreciate the most challenging criticism and educational comments, for as long as they sensibly undermine and refute my own analysis, as I would have greater pleasure to be proven wrong and taught something useful than given applause on formed opinions that remain unchallenged, for there is nothing worse than a dead mind dulled in stagnant still waters.
1 - 11 DEC 2013: Reserve Bank of New Zealand Governor Graeme Wheeler kept the official cash rated at 2.5% on Thursday, but said it is not necessary to keep it there much longer. "It is becoming unnecessary to maintain the current degree of monetary stimulus", regarding consideration of a rate increase.
- Source: efxnews.com/story/22044/rbnz-keeps-ocr-25-can-hike-needed-meet-price-aim
2 - 29 JAN 2014: "While headline inflation has been moderate, inflationary pressures are expected to increase over the next two years," Wheeler said. "In this environment, there is a need to return interest rates to more-normal levels. The Bank expects to start this adjustment soon."
- Source: efxnews.com/story/22657/rbnz-keeps-ocr-25-signals-hike-imminent-inflation
David Alcindor
4xForecaster
⋅
OVERALL:
As mentioned above, the system favors further rallying, and in the context of a deteriorating Chinese data, NZD will need to look at internal economic pressures to justify the "imminent rate hike" which the news has been referring to since last December 2013, or a significant deterioration in the US market, prompting a hesitant Fed to revise its recent easing reversal stance.
The technicals depend on advanced pattern projections of a potential Butterfly developing its last CD impulse leg with a completion level in line with "TG-Hi = 0.94565 - 08 MAR 14", and corroborating with a separate predictive analysis and forecasting system.
PS: If you liked the analysis, feel free to give it a "Thumb Up" and pass of a friendly referral to friends interested in occult market mathematics and hidden geometries. All targets generated are defined by non-price means, and confirmed by either proprietary patterns (Euclid, Janus, Great White, Deep Shark), or other well known patterns. However, we concentrate mainly on Shark, 5-0 and occasional Bats, to complement our predictive analysis and forecasting - Cheers, David Alcindor.
-----------------------------------------------------
Get signals, analyses and forecasts on Twitter
Alias: @4xForecaster -----------------------------------------------------
Disclaimer: Forecasts, analyses and directional opinions generated herein are for educational purposes only and are not trading recommendations. We trust that you will do your own due diligence first, then seek professional advice from a licensed professional, then enter the market at your own perils - David Alcindor - TradingView.com Alias: 4xForecaster