Kiwi Crosses Point Towards Further Weakness Ahead
Matt Simpson September 16, 2019 10:57 PM
NZD crosses are falling in tandem which suggests broader weakness awaits.
NZD/USD remains in a clear downtrend, and the retracement from the 0.6269 low appears to have had its day. The correction failed to retest the 38.2% Fibonacci level and, after a few days of consolidation, printed a bearish pinbar which was also a bearish outside day. Bearish momentum is clearly back with prices back beneath the 2016 low. The bias is for a re-test of 0.6294 and break lower, whist 0.6451 holds as resistance.
NZD/JPY is sensitive to risk appetite, although it may have topped without risk-off being required. For example, USD/JPY and AUD/JPY are holding up well (considering yesterday’s explosive move on oil markets) and with NZD/JPY suggesting a swing-high is in place, bears may want to keep an eye on this in case risk appetite sours.
- A bearish pinbar failed to see prices close above January’s flash-crash on Thursday, and Friday saw a break beneath its low to warn of a near-term top.
- Bearish momentum has taken the cross to a 7-session low. With momentum having reverted to its longer-term bearish trend, we’d consider bearish setups whilst the hammer high (or prior support around 36.75) hold as resistance.
- Bears could use a break of the 20-day eMA/38.2% Fibonacci level to assume bearish continuation, using the 50% and 61.8% levels as interim, bearish targets.
GBP/NZD broke out of compression on the back of a stronger British pound on Friday. Over the near-term we’d prefer to see some more consolidation, given that range expansion paused at the upper Keltner band ahead of yesterday’s doji with a slight bearish divergence.
- A retracement towards 1.9415 would be a welcome development for traders who like to buy dips. Or traders can refer to lower timeframes to trade continuation patterns for smaller moves.
- The spike high near 1.6979 could provide interim resistance, but if prices trade above here the target becomes the high around 2.000.
NZD/CAD's short swing-trade idea finally appears to be playing out. A bearish wedge has formed during a strong downtrend, and the retracement respected 0.8500 resistance before rolling over yesterday. The underlying analysis remains unchanged; bearish below 0.8500 with potential to target (or even break below) the 2018 low.
Disclaimer: The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.
Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex and commodity futures, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to Forex.com or GAIN Capital refer to GAIN Capital Holdings Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.