NZD/USD trades at channel boundary
The steady sideways momentum that was driven the pair on Thursday, changed swiftly mid-session when the New Zealand Dollar breached the monthly PP at 0.7277 and plunged against the US Dollar.
This downfall was restricted by the 200-hour SMA which consequently pushed the rate slightly higher. This, however, was only a short-term correction that was followed by another decline. As a result, the pair was located at to the bottom channel boundary by mid-Thursday.
Except for the given line, there is no other barriers limiting a decrease until the weekly S1 at 0.7160. Nevertheless, the lower channel boundary is not expected to be breached, as technical indicators signal to a possible recovery. The Kiwi should therefore return near the 200-hour SMA and the 23.6% Fibo.
This downfall was restricted by the 200-hour SMA which consequently pushed the rate slightly higher. This, however, was only a short-term correction that was followed by another decline. As a result, the pair was located at to the bottom channel boundary by mid-Thursday.
Except for the given line, there is no other barriers limiting a decrease until the weekly S1 at 0.7160. Nevertheless, the lower channel boundary is not expected to be breached, as technical indicators signal to a possible recovery. The Kiwi should therefore return near the 200-hour SMA and the 23.6% Fibo.
Trade closed: target reached:
Driven by solid upside risks since September 14, the New Zealand managed to breach a minor descending channel and even test the 50.0% Fibo and the weekly R1 near the 0.7345 mark.
The given area, however, proved to be a turning point that set the pair for a decline past the 38.2% Fibo and towards a strong support set by the weekly PP and the 100-, 55– and 200-hour SMAs in the 0.7260/56 area.
Even if this support cluster is reached, it is unlikely that bears gain enough momentum to break past it. Consequently, the rate should end the current short-term correction against the general wave up and try to push for the weekly R1 and the 50.0% Fibonacci retracement once more.
Driven by solid upside risks since September 14, the New Zealand managed to breach a minor descending channel and even test the 50.0% Fibo and the weekly R1 near the 0.7345 mark.
The given area, however, proved to be a turning point that set the pair for a decline past the 38.2% Fibo and towards a strong support set by the weekly PP and the 100-, 55– and 200-hour SMAs in the 0.7260/56 area.
Even if this support cluster is reached, it is unlikely that bears gain enough momentum to break past it. Consequently, the rate should end the current short-term correction against the general wave up and try to push for the weekly R1 and the 50.0% Fibonacci retracement once more.
Comment:
As expected, a cluster formed by the 55-, 100– and 200-hour SMAs succeeded at supporting the pair, thus ending the prolonged intraday plunge near the 0.7260 mark. The New Zealand Dollar has since re-gained strength and reached the 38.2% Fibonacci retracement.
The last four trading session demonstrate that the pair has formed a short-term ascending channel. However, given the steepness of this formation, it is not expected to last any longer. In case the rate failed to accelerate, the channel would show a change in sentiment.
Technical indicators suggest that the rate is likely to trade sideways for the following hours, as the combined support of the 38.2% Fibo and the 55-hour SMA might restrict the pair. Meanwhile, the upside is guarded by the weekly R1 and the 50.0% Fibo circa 0.7345.
As expected, a cluster formed by the 55-, 100– and 200-hour SMAs succeeded at supporting the pair, thus ending the prolonged intraday plunge near the 0.7260 mark. The New Zealand Dollar has since re-gained strength and reached the 38.2% Fibonacci retracement.
The last four trading session demonstrate that the pair has formed a short-term ascending channel. However, given the steepness of this formation, it is not expected to last any longer. In case the rate failed to accelerate, the channel would show a change in sentiment.
Technical indicators suggest that the rate is likely to trade sideways for the following hours, as the combined support of the 38.2% Fibo and the 55-hour SMA might restrict the pair. Meanwhile, the upside is guarded by the weekly R1 and the 50.0% Fibo circa 0.7345.
Comment:
As expected, NZD/USD was trading sideways until early Wednesday. This lack of volatility changed considerably at 0600GMT when the Kiwi surged 55 pips in the first two minutes.
This strong momentum was supposedly caused by the latest election poll that showed the National Party standing at 46%, compared to its main rival—Labour—ahead of Saturday’s general election. As a result, the rate managed to reach the upper channel boundary near the 0.7380 mark.
The rate might still edge higher until the 61.8% Fibo and the weekly R2 circa 0.74; however, the base scenario favours either a relatively flat movement between the weekly R1 and R2 or a breakout of the former, reinforced by the 50.0% Fibo, towards the 55-hour SMA at 0.7301.
As expected, NZD/USD was trading sideways until early Wednesday. This lack of volatility changed considerably at 0600GMT when the Kiwi surged 55 pips in the first two minutes.
This strong momentum was supposedly caused by the latest election poll that showed the National Party standing at 46%, compared to its main rival—Labour—ahead of Saturday’s general election. As a result, the rate managed to reach the upper channel boundary near the 0.7380 mark.
The rate might still edge higher until the 61.8% Fibo and the weekly R2 circa 0.74; however, the base scenario favours either a relatively flat movement between the weekly R1 and R2 or a breakout of the former, reinforced by the 50.0% Fibo, towards the 55-hour SMA at 0.7301.
Comment:
The New Zealand Dollar continued to appreciate against the Greenback until the weekly R2 and the 61.8% Fibo circa 0.7400, thus providing the third confirmation of the junior channel line.
FOMC comments at 1800GMT sent the rate for a plunge down to the weekly R1. This upward momentum, however, did not stop there, but continued to prevail until the 100-hour SMA at 0.7301 was reached mid-Thursday. The rate breached the lower boundary of the junior channel and thus may consequently approach the bottom channel line near 0.7240 in the medium term.
It is likely that the Kiwi continues to move lower until the 200-hour SMA and the monthly PP. This might mark a reversal point that could either sent the rate for a surge or lead to a minor consolidation period.
The New Zealand Dollar continued to appreciate against the Greenback until the weekly R2 and the 61.8% Fibo circa 0.7400, thus providing the third confirmation of the junior channel line.
FOMC comments at 1800GMT sent the rate for a plunge down to the weekly R1. This upward momentum, however, did not stop there, but continued to prevail until the 100-hour SMA at 0.7301 was reached mid-Thursday. The rate breached the lower boundary of the junior channel and thus may consequently approach the bottom channel line near 0.7240 in the medium term.
It is likely that the Kiwi continues to move lower until the 200-hour SMA and the monthly PP. This might mark a reversal point that could either sent the rate for a surge or lead to a minor consolidation period.
Comment:
After breaching the lower boundary of a junior channel, the Kiwi entered a minor consolidation period which was caused by the rate’s failure to breach the 100-hour SMA. However, a breakout of this line was not followed by a plunge but rather a slight decline until the 200-hour SMA, the monthly PP and the 38.2% Fibonacci retracement sent the Kiwi north.
In general, the main event affecting the pair today is the New Zealand general elections. In case no surprises occur in terms of the leading party, traders could see some leaps in the wake of the polling data, but it should not affect the pair massively.
Thus, the base scenario favours the rate fluctuating in the 0.7350/0.7280 between the weekly R1 and the 50.0% Fibo (resistance) and the 200-hour SMA and the monthly PP (support).
After breaching the lower boundary of a junior channel, the Kiwi entered a minor consolidation period which was caused by the rate’s failure to breach the 100-hour SMA. However, a breakout of this line was not followed by a plunge but rather a slight decline until the 200-hour SMA, the monthly PP and the 38.2% Fibonacci retracement sent the Kiwi north.
In general, the main event affecting the pair today is the New Zealand general elections. In case no surprises occur in terms of the leading party, traders could see some leaps in the wake of the polling data, but it should not affect the pair massively.
Thus, the base scenario favours the rate fluctuating in the 0.7350/0.7280 between the weekly R1 and the 50.0% Fibo (resistance) and the 200-hour SMA and the monthly PP (support).
Comment:
The New Zealand Dollar was fluctuating between the weekly PP and the 200-hour SMA on Friday. The latter was breached early in this session when the rate fell down to 0.7256.
The pair’s movement since early Friday has confirmed the existence of a short-term descending channel. Technical indicators suggest that the pair could edge slightly lower down to the bottom boundary of the senior channel near 0.7250 in this session.
This scenario would demonstrate the prevalence of the senior formation that should guide the pair towards the upper channel boundary this week. Thus, the 200-, 55– and 100-hour SMAs, along with other resistance levels, are likely to be breached. This area, however, should provide hindrance.
The New Zealand Dollar was fluctuating between the weekly PP and the 200-hour SMA on Friday. The latter was breached early in this session when the rate fell down to 0.7256.
The pair’s movement since early Friday has confirmed the existence of a short-term descending channel. Technical indicators suggest that the pair could edge slightly lower down to the bottom boundary of the senior channel near 0.7250 in this session.
This scenario would demonstrate the prevalence of the senior formation that should guide the pair towards the upper channel boundary this week. Thus, the 200-, 55– and 100-hour SMAs, along with other resistance levels, are likely to be breached. This area, however, should provide hindrance.
Comment:
The NZD/USD exchange rate remained stable on Monday, being located right below the 200-hour SMA and the monthly PP for the whole trading session.
The rate tested the bottom boundary of the senior channel early on Tuesday, and it was expected that the Kiwi would reverse to the upside. The weekly S1, however, proved to be an unbreakable resistance that led the pair for a plunge down to the lower barrier of the junior channel.
Technical indicators are located at or near their historic lows and, taking into account that the next support is the relatively distant weekly S2 at 0.7152, traders could see a reversal near this junior channel line.
The upside target is the 0.7278 mark, reinforced by the 200– and 100-hour SMAs and the 38.2% Fibo.
The NZD/USD exchange rate remained stable on Monday, being located right below the 200-hour SMA and the monthly PP for the whole trading session.
The rate tested the bottom boundary of the senior channel early on Tuesday, and it was expected that the Kiwi would reverse to the upside. The weekly S1, however, proved to be an unbreakable resistance that led the pair for a plunge down to the lower barrier of the junior channel.
Technical indicators are located at or near their historic lows and, taking into account that the next support is the relatively distant weekly S2 at 0.7152, traders could see a reversal near this junior channel line.
The upside target is the 0.7278 mark, reinforced by the 200– and 100-hour SMAs and the 38.2% Fibo.
The New Zealand Dollar was able to gain strength against the Greenback on Thursday and reverse circa 0.7190. This move was followed by a surge that surpassed the weekly PP and the 200-, 55– and 100-hour SMAs without any hindrance.
Following weak data on US Retail Sales at 1230GMT today, the rate swiftly shot up to the upper channel boundary and the 38.2% Fibo, but eventually settled at the monthly PP.
The pair’s movement during the last three weeks reveals a more senior channel up. As the pair already tested the bottom channel boundary on September 14, the current upside movement might mark the formation of a new up-trend. Nevertheless, it is expected that the rate might still respect the junior channel in the short-term and therefore re-test the 100-hour SMA by mid-Monday.