daily market outlook

[jebat66]

NZD/CHF formed a clear double top near the 0.6800 psychological resistance level. At the same time, the RSI oscillator is showing bearish divergence that could signal about a potential reversal or a correction down.

Overall the ascending channel was previously broken and Fibonacci applied to the breakout point shows potential downside target levels.

Today, price rejected the mid-line of the channel and started moving down. Consider selling NZD/CHF at the current level targeting either S2 (0.6585), S3 (0.6520), or S4 (0.6450) support levels. Stop loss should be placed above the 0.6800 resistance level.

Support: 0.6670, 0.6585, 0.6520, 0.6450

Resistance: 0.6800

 

[jebat66]

USD/JPY is expected to trade with bullish bias. Overnight, US stock indexes retreated as investors found the latest results of some blue-chip companies disappointing. The Dow Jones Industrial Average dropped 0.6% to 17,982, the S&P 500 lost 0.5% to 2,091, and the Nasdaq Composite was down 2 points to 4,945.

Nymex crude oil declined 2.3% to $43.18 a barrel. In a very volatile session, gold rose 0.4% to $1,248 an ounce (daily high at $1,270), and silver was also up 0.4% to $17.00 an ounce (daily high at $17.70). The benchmark 10-year Treasury yield rose further to 1.870% from 1.850% in the previous session.

The European Central Bank decided to keep interest rates steady, while ECB President Mario Draghi indicated that further rate cuts are possible. Those comments weighed on the euro and EUR/USD finally eased 0.1% to 1.1286 through a session that saw a high of 1.1394.

At the same time, GBP/USD slid 0.1% to 1.4321 (daily high at 1.4439), and USD/JPY was down 0.4% to 109.44. Meanwhile, commodity-linked currencies weakened against the US dollar, with USD/CAD gaining 0.6% to 1.2734, AUD/USD falling 0.7% to 0.7737, and NZD/USD was down 1.0% to 0.6910. The pair reached a high of 109.89 yesterday before entering a consolidation. Currently it is trading below the 20-period (30-minute chart) moving average, which has crossed below the 50-period one, while the intraday relative strength index is placed below the neutrality level of 50. However, the key support at 109.15 has not been breached. In case the pair emerges on the upside upon completing the consolidation, it should re-test the first upside target at 111.05 before challenging the second one at 111.45.

Trading Recommendation:

The pair is trading above its pivot point. It is likely to trade in a wider range as long as it remains above its pivot point. Therefore, long positions are recommended with the first target at 111.05 and the second one, at 111.40. In the alternative scenario, short positions are recommended with the first target at 108.75 if the price moves below its pivot points. A break of this target is likely to push the pair further downwards, and one may expect the second target at 108.50. The pivot point is at 109.15.

Resistance levels: 111.05, 111.40, 112

Support levels: 108.75, 108.50, 108.10

 

[jebat66]

USD/CHF is expected to post more gains. The pair stands above 0.9695 and remains on the upside. The rising 20-period moving average is playing a support role and maintains a positive bias. Meanwhile, the relative strength index stays above 50 and is positively oriented. Further upside is therefore expected with the next horizontal resistance and overlap set at 0.9820. A break above this level would call for further advance towards 0.9845 in extension.

Trading Recommendations:

The pair is trading above its pivot point. It is likely to trade in a wider range as long as it remains above its pivot point. Therefore, long positions are recommended with the first target at 0.9820 and the second one, at 0.9845. In the alternative scenario, short positions are recommended with the first target at 0.9645 if the price moves below its pivot points. A break of this target is likely to push the pair further downwards, and one may expect the second target at 0.9620. The pivot point is at 0.9695.

Resistance levels: 0.9820, 0.9845, 0.9890

Support levels: 0.9645, 0.9620, 0.9575

 

[jebat66]

NZD/USD is under pressure. The pair has been capped by its descending 20-period and 50-period moving averages and is looking for a lower bottom. Meanwhile, the relative strength index stays below 50. Even though a technical rebound is possible, its extent should be limited. The first target to the downside is set at the horizontal support and overlap at 0.6840. A break below this level would open the way to further weakness towards 0.6820.

Trading recommendations:

The pair is trading below its pivot point. It is likely to trade in a lower range as long as it remains below the pivot point. Short positions are recommended with the first target at 0.6840. A break of this target will move the pair further downwards to 0.6820. The pivot point stands at 0.6980. In case the price moves in the opposite direction and bounces back from the support level, it will move above its pivot point. It is likely to move further to the upside. According to that scenario, long positions are recommended with the first target at 0.7025 and the second target at 0.7055.

Resistance levels: 0.7025, 0.7055, 0.71

Support levels: 0.6840, 0.6820, 0.6775

 

[jebat66]

GBP/JPY is expected to trade with bullish bias. The pair is currently testing its nearest support at 156.20, while the relative strength index lacks downward momentum. As long as 156.20 is not broken down, further upside is expected with the next horizontal resistance and overlap set at 159 at first. A break above this level would call for further advance towards 159.60 in extension.

Trading Recommendations:

The pair is trading above its pivot point. It is likely to trade in a wider range as long as it remains above its pivot point. Therefore, long positions are recommended with the first target at 159 and the second one, at 159.60. In the alternative scenario, short positions are recommended with the first target at 155.60 if the price moves below its pivot points. A break of this target is likely to push the pair further downwards, and one may expect the second target at 154.75. The pivot point is at 156.20.

Resistance levels: 159, 159.60, 160.15

Support levels: 155.60, 154.75, 154.05

 

[jebat66]

Overview:

The NZD/USD pair dropped sharply from the level of 0.7053 towards 0.6875. Now, the price is set at 0.6887 to act as a daily pivot point. It should be noted that volatility is very high for that the NZD/USD pair is still moving between 0.6823 and 0.6985 in coming hours. Furthermore, the price was set below the strong resistance at the levels of 0.6985 and 0.7053, which coincides with the 78.6% and 100% Fibonacci retracement level respectively. Additionally, the price is in a bearish channel now. Amid the previous events, the pair is still in a downtrend. From this point, the NZD/USD pair is continuing in a bearish trend from the new resistance of 0.6887. Thereupon, the price spot of 0.6887 - 0.7053 remains a significant resistance zone. Therefore, a possibility that the NZD/USD pair will have downside momentum is rather convincing and the structure of a fall does not look corrective. In order to indicate a bearish opportunity below 0.6887, sell below 0.6887 with the first targets at 0.6850 and 0.6823 (the double bottom is seen at 0.9785). On the other hand, if the pair succeeds to pass through the level of 0.6823, the market will indicate a bullish opportunity above the level of 0.6823 in order to return to test the daily resistance at 0.6887.