NZD/USD Technicals – Bearish Below 0.83 But L/T Follow-through unlikely

NZD/USD Technicals – Bearish Below 0.83 But L/T Follow-through unlikely
dollar

Kiwi remains firmly on the backfoot today. Prices were already depressed during the US session yesterday led by a concern stimulus hint that led USD higher, with prices remaining close to 0.83 round number support in the early hours of Asia . Strong economic data (ANZ Job Advertisements and Business NZ Performance Manufacturing Index) published (5.00 -5.30am SGT) probably helped 0.83 to take at first, but the level of support finally gave way, causing a strong downward thrust and hitting a low of 0.8261.

timetable

The main reason for this decline appears to be technical pressure, the price has been consistently supported less by descending trend line is at stake for the decline in early US session. The break of 0.83 is further fueled by surprisingly weak data compiled by HSBC Manufacturing PMI, which hit a low 6 months with a 49.6 print. It also suggests that Chinese manufacturing is actually down compared to the expectation of a modest increase to 50.6.

However, it is interesting to see prices bounce before 0.826 support is marked when the price should have been able to significantly lower trade, since bears are on a fresh roll off the break 0 83. This implies that the overall feeling is not as bearish as we think it is. In addition, the price rebound allows a new channel to take, suggesting that technical pressures are still strong enough. Given all this, the probability of prices break the newly formed descending channel becomes less, and a push toward the bottom of the English Channel and down swing around 0.821 is possible should bearish rejection was confirmed.

Graph Daily

This notion is echoed by daily chart, which goes further by suggesting that the ultimate downside target would be 0,815 as the downward thrust of the consolidation ceiling remains intact. Stochastic readings pointing up now, but it is possible that the stoch curve can reverse given the priority in the past which made a 50.0 "resistance."

Basically, it is possible that prices are bearish for now because FX traders are looking to the FOMC rate decision next week and I think the Fed will implement the next cone. There are some problems with this view - firstly, timing candles QE should not really affect USD towards the long term because it is a fact that the stimulus will end one day, and date is likely to be in 2015. Second, the market reaction to economic issues bullish / bearish are not reversed, suggesting that traders are no longer worrying about whether such new persuade / dissuade the Fed to implement the next tapered action. Therefore, traders hope that the outcome of the FOMC next week will lead NZD / USD long-term decline will find themselves disappointed when the dust settled even if the Fed to implement a new cone. In addition, the RBNZ will make its own policy announcement just hours after the announcement of the FOMC who can deny the bearish impact of any sharp action

Links :.
GBP / USD - Looks threatening resistance at 1.66 Again
AUD / USD - Returns to the key 0.88 level
EUR / USD - Continue to stroll around the 1.3550 Key Level

This article is only for general information purposes. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or its subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

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