New Zealand Dollar Sets Up for Bullish Move
The kiwi had a solid move against the dollar on Friday, gaining 1.14 percent. The move came as commodities rebounded, thus pushing up their respected commodity FX.
This was a response to the weaker dollar, but commodities saw their sixth week of capital inflows as traders deem a more risk-on approach in the medium-term. The move into commodities has been the longest in eight months.
The daily chart has formed a “cup and handle” pattern. Typically more consistent on the weekly chart, but price action has been able to form a rounded bottom which coincides with weekly price support.
The handle is formed as price begins to fade upward momentum and can resemble a bull flag or pennant.
If NZDUSD can close above .6770, the pair will likely break out of the downward consolidation (shaded box). Traders’ risk sentiment will fuel either the run up to the 200-day EMA near .7000, or cause the kiwi to trend lower to price support of .6638 – at this point the subjective pattern could show signs of breaking down.
If the pair does close below the 50-day EMA, price support would be sought out as downward targets.
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This was a response to the weaker dollar, but commodities saw their sixth week of capital inflows as traders deem a more risk-on approach in the medium-term. The move into commodities has been the longest in eight months.
The daily chart has formed a “cup and handle” pattern. Typically more consistent on the weekly chart, but price action has been able to form a rounded bottom which coincides with weekly price support.
The handle is formed as price begins to fade upward momentum and can resemble a bull flag or pennant.
If NZDUSD can close above .6770, the pair will likely break out of the downward consolidation (shaded box). Traders’ risk sentiment will fuel either the run up to the 200-day EMA near .7000, or cause the kiwi to trend lower to price support of .6638 – at this point the subjective pattern could show signs of breaking down.
If the pair does close below the 50-day EMA, price support would be sought out as downward targets.
Please follow me on Twitter @Lemieux_26
Check my posts out at:
bullion.directory/ab...christopher-lemieux/
www.investing.com/members/200193197
www.teachingcurrencytrading.com
oilpro.com/chrislemieux
Comment:
CME Fed fund futures are implying the Fed will hike in DEC, but scratch the plain 25 bps move. Fed fund futures implying the Fed will increase by 50 bps - double then what was previously thought.
Yesterday the probability for a 25 bps move was 47%, today its 41%
Yesterday the probability for a 50 bps move was 52%, today its 58%
Dollar is surging!
Yesterday the probability for a 25 bps move was 47%, today its 41%
Yesterday the probability for a 50 bps move was 52%, today its 58%
Dollar is surging!
If price action closes below channel, downside targets in play.