Dollar Drops Before Christmas

Indices climbed higher after another V-shaped reversal.

The dollar Index bounced off the lower line of the pennant. Sideways movement continues but the end is near.

The GBPUSD bounced nicely from the 38,2% Fibonacci. Finally!

The same goes for the NZDUSD. The triple bottom formation looks complete.

The USDCHF completely lost momentum. Watching paint dry is actually more interesting than trading the USDCHF.

The EURNZD continued the reversal to the downside after the false breakout pattern from the beginning of the week.

The CHFJPY finally escaped from the weeks-long sideways trend. The breakout is to the upside.

The CADCHF reversed and created a false breakout pattern and is ready for a further rise.

Silver defended its 22 USD level. A great success butt there’s still a lot of work for buyers to do.

Dollar Continues Moving Sideways

DAX performs a V-shaped reversal but the optimism stops today on a crucial resistance; 15440 points.

Brent Oil bounces off a crucial dynamic support.

Dollar Index extends the pennant formation awaiting the breakout.

EURUSD enters the rectangle pattern continuing the sideways movement.

After choppy movements, GBPUSD finds itself still trading above the 38,2% Fibonacci.

The same with NZDUSD, which is doing everything to stay above the 38,2% Fibo.

USDCHF continues trading inside of the symmetric triangle pattern.

EURNZD jumps above important horizontal resistance and today, testing it as a support.

CADCHF breaks an absolutely crucial long-term support. That’s a strong sell!

For a look at all of today’s economic events, check out our economic calendar.

Gold and Silver Drop. The Same Happens With EM Currencies

Gold is in a correction mode aiming to test the 1836 USD/oz as a crucial support.

Silver also dropped but here the price is still inside the flag formation.

The DAX bounced off an important horizontal support. Covid fears in Europe have accelerated.

The EURNZD is defending an important horizontal support with a head and shoulders pattern. The buy signal is still not here, we need to see the breakout of the neckline first.

The EURUSD is struggling to defend the 61.8% Fibonacci, especially after the price failed to stay above the psychological barrier of 1.14.

The EURPLN went vertical after the price broke from the ascending triangle to the upside.

The USDMXN could do the same as the EURPLN, the price is testing the upper line of the triangle as we speak.

The EURMXN is defending a crucial support inside of the giant wedge pattern. Soon we should see a decisive movement here.

For a look at all of today’s economic events, check out our economic calendar.

EUR Starts a Correction, NZD Flexes Muscles

Gold stays strong and enjoys a rather flat correction, which indicates a bullish power.

Silver tests the neckline of the iH&S pattern and defends it with a nice upswing, which is also very optimistic.

EURNZD drops after testing the crucial dynamic support as the newest resistance.

AUDNZD drops sharply after the price makes the false breakout above three major resistances.

CHFJPY reaches 38,2% and bounces higher – a classical movement for price action traders.

USDCHF tests the upper line of the symmetric triangle pattern and creates a shooting star on the daily chart, which is rather negative.

EURUSD bounces from the 61,8% Fibonacci with a pin bar, this may be the start of a bullish correction.

EURPLN continues the upswing driven by the bullish breakout from the ascending triangle pattern.

For a look at all of today’s economic events, check out our economic calendar.

EUR/NZD Bears Are Retesting M H3 Camarilla

EUR/NZD Technical Analysis

  • Bears are retesting M H3 level
  • The market is bearish
  • Below M H3 the target is M L3
  • Selling the rallies continues

  1. Order block support
  2. Trendline swing high
  3. Bearish rejection
  4. Target

The market is still bearish. The RBNZ is happy to see high inflation and good employment. Additionally, the RBNZ has the highest cash rate among all major central banks and they will probably increase rates further. This is all bullish for the NZD. The EUR/NZD is set to drop below 1.5305 and could possibly retest 1.6130 again. Below 1.6130 we should see 1.5903 as the main target.

For a look at all of today’s economic events, check out our economic calendar.

Cheers and safe trading,

Nenad

 

Silver and Gold Do Not Ease the Tempo

Definitely, the main story for most traders is the buy signal on precious metals. This is no surprise, and if you’ve been following Trader’s Edge, you’ll know that I’ve been expecting this for quite some time.

Gold created a very handsome inverse head and shoulders pattern, which created enough bullish momentum to break crucial horizontal and dynamic resistances. We may experience a pullback but the buy signal is here to stay.

Silver made an even better iH&S formation. We already broke the neckline of this pattern and the positive sentiment is all over the place.

SP500 looks positive and the correction from the previous week is probably only a memory now.

DAX is climbing higher, making stairs so flat horizontal corrections. New all-time highs are pretty close.

EURJPY is defending the last important support. Once it’s gone, any positive sentiment will be gone too.

EURNZD is showing us the power of the bearish trend and also the power of a false breakout.

AUDNZD is aiming few important resistances inside of a wedge pattern. This can end with a massive drop.

CHFJPY is showing us two head and shoulders patterns. One is already fulfilled. The second one’s in progress…

For a look at all of today’s economic events, check out our economic calendar.

New Zealand Raises Rates for First Time in Seven Years, More to Come

The 25 basis point rate hike marks the start of a tightening cycle that had been expected to begin in August, but was delayed after an outbreak of the coronavirus Delta variant and a lockdown that is continuing in its biggest city Auckland.

The increase in the cash rate to 0.50% by the Reserve Bank of New Zealand (RBNZ) had been forecast by all 20 economists polled by Reuters.

The New Zealand dollar briefly rose after the announcement but fell back to $0.6930, in line with broader market moves.

“It was pretty much in line with what everyone was picking,” said Jason Wong, senior market strategist at BNZ in Wellington. “We’re on a path towards a series of rate hikes and the market is well priced for that.”

Announcing its decision, the RBNZ said further removal of monetary policy stimulus was expected, with future moves depending on the medium-term outlook for inflation and employment.

The rate hike puts New Zealand ahead of most other developed economy nations as central banks look to wind back emergency-level borrowing costs, although countries including Norway, the Czech Republic and South Korea  have already raised rates.

In neighbouring Australia, the central bank held interest rates at a record low 0.1% for an 11th straight month on Tuesday.

Economists expect the benchmark rate to reach 1.50% by the end of next year and 1.75% by the end of 2023, the Reuters poll showed.

CAPACITY STRAINS

The South Pacific nation has enjoyed a rapid economic recovery since a COVID-driven recession last year, partly because it eliminated coronavirus and reopened its economy before others.

But with its borders still shut, labour and goods shortages are pushing up inflation, as well as contributing to a surging property market, which has been driven by ultra-low interest rates.

“Demand shortfalls are less of an issue than the economy hitting capacity constraints…,” the RBNZ Committee noted in the minutes of the meeting.

The central bank said headline CPI inflation is expected to increase above 4% in the near-term but return towards its 2% midpoint over the medium term.

Recent COVID-19 restrictions have not materially changed the medium-term outlook for inflation and employment, and economic activity will recover quickly when the measures are eased, it added.

But economists said the RBNZ may not race ahead with its hiking cycle in view of the current global uncertainty and the Delta variant outbreak dragging on in Auckland.

“(We) remain of the view that further rate hikes will be in 25 basis point increments rather than 50 basis point moves,” said Citibank economist Josh Williamson.

New Zealand abandoned its strategy of eliminating COVID-19 this week, with the government saying it will have to live with the virus and step up vaccination rates to control it.

In August, a central bank official confirmed it had also considered a 50-basis-point move that month, before taking a rate hike off the table altogether due to the lockdown.

For a look at all of today’s economic events, check out our economic calendar.

(Additional reporting by Tom Westbrook in Singapore; Editing by Richard Pullin)

Say Bye-Bye to Major Supports. We May Not See Those Levels for a While

And it happened! The bears were talking about this for a long time and it finally happened; a bearish correction. The price broke the long-term up trendline on the SP500 and is aiming lower. The target for the drop is still far away, so it might be nice to buckle up.

The DAX also dropped like a rock after the breakout of the long-term up trendline and the neckline of the triple top formation. The next target: 14100 points.

Although indices are sliding, gold is not climbing higher. A stronger dollar is definitely not helping.

The GBPUSD came back inside the falling wedge pattern. That’s definitely negative.

The CADJPY is aiming for the 38,2% Fibonacci to test it as a crucial support.

The EURNZD is inside a small sideways trend. A breakout from it, will show us a direction.

The EURJPY has failed to create the inverse head and shoulders pattern and dropped lower.

The USDJPY bounced from the upper line of the triangle and brought us a sell signal with the target being on the lower line of this pattern.

For a look at all of today’s economic events, check out our economic calendar.

Situation on Major Instruments Before the Inflation Data

The SP500 tries a reversal with an inverse head and shoulders pattern bouncing off a major up trendline.

The DAX is very close to breaking two major horizontal resistances.

Gold is on the way to test an important horizontal support at 1782 USD/oz.

Oil continues its upswing after escaping from the flag pattern.

The EURCHF needs to close the day above the down trendline in order to get a proper buy signal.

The EURJPY is in the process of creating a right shoulder of a very promising inverted Head and Shoulder pattern.

The EURNZD continues the drop after broken supports were tested as resistance.

The AUDCAD is going to test a major support level on the 38,2% Fibonacci.

The USDJPY is getting closer and closer to end the long-term symmetric triangle pattern.

For a look at all of today’s economic events, check out our economic calendar.

The New Week Starts With the Risk ON Mode

Indices are trying to start the new week off on the front foot.

SP500 bounces from the long-term up trendline in the same way it did many times before.

Gold escapes from the wedge to the downside. The negative sentiment is back.

Oil breaks the upper line of the flag and aims higher.

EURUSD goes down after the breakout of the neckline.

GBPUSD with a third Head and Shoulders pattern in a row. The previous two worked flawlessly.

AUDCAD, after a flat correction, is ready for another upswing.

USDJPY gets close to the end of the symmetric triangle, we’re waiting for a bigger move here.

EURJPY has a chance of creating a nice right shoulder, which would help to end the bearish correction.

EURNZD is ready to continue the downswing after the price tested broken supports as the closest resistances.

For a look at all of today’s economic events, check out our economic calendar.

Tuesday is a Correction Day!

So far Tuesday looks like a correction day pretty much everywhere; on indices, currencies and commodities.

The SP500 dropped to test the lower line of the triangle pattern.

The DAX is staying strong above major supports.

Gold dropped removing all the post NFP gains.

The GBPUSD is in an important battle on the neckline of the Head and Shoulders formation. A breakout could be lethal.

The USDCAD is climbing up to test a crucial mid-term horizontal resistance.

The AUDCAD is also in correction mode but still above the absolutely crucial support on the 38,2% Fibonacci.

The EURNZD has managed to climb back above the horizontal resistance but is still below the lower line of the flag.

For a look at all of today’s economic events, check out our economic calendar.

EUR/USD and GBP/USD Start a New Week With a Bearish Correction

Today is Labor Day in the US and Canada, so traders from North America aren’t active, which could lead to lower volatility.

The SP500 is in an ascending triangle pattern looking north.

The DAX has come back above major supports. That was a false breakout, which may result with a proper upswing.

Gold is in a correcting movement since Friday but still in positive territory.

The EURUSD started the new week with a drop. That’s thanks to the shooting star from Friday.

The GBPUSD is aiming at the lower line of the flag, it’s time to test it as a support again.

The AUDCAD is continuing the upswing despite a very pessimistic candle on Thursday.

The EURNZD broke the crucial horizontal support along with the lower line of the flag. That is a very negative sign.

For a look at all of today’s economic events, check out our economic calendar.

Three Bearish Days of a Correction is Enough or We Are Just Warming Up?

Stocks and indices are dropping but three consecutive bearish days, is usually as much as sellers can do. Is it a good time for a bullish reversal? Especially that the SP500 is currently very close to a very important up trendline.

WTI Oil broke a crucial horizontal support and is aiming for the first Fibonacci retracement.

Gold is standing firm supported by the risk OFF mode but slightly bothered by the stronger USD.

The EURUSD is still dropping after breaking the neckline of a huge Head and Shoulders pattern.

The GBPUSD still has some room to the neckline, which makes it a plan minimum for the sellers.

The NZDUSD broke an important dynamic support and is aiming lower.

The EURNZD is close to a bullish breakout from the symmetric triangle pattern.

The NZDCHF continues to decline after a false bullish breakout from a very handsome flag pattern.

For a look at all of today’s economic events, check out our economic calendar.

Monday Redness

We start a new week with a decline in major indices. The SP500 dropped and is aiming for the target of 4250.

The DAX, is aiming for the support level of 14800 after breaking a major uptrend line.

Gold is suffering from a stronger USD.

Oil broke the neckline of a head and shoulders pattern and is aiming lower.

The same with the EURUSD, here the potential drop can be huge.

The GBPUSD also broke a major support that is coming from the double top formation.

The EURNZD is waiting for a breakout from the symmetric triangle.

The GBPCHF is moving sideways inside of a rectangle pattern.

The AUDUSD broke the 23,6% Fibonacci and is aiming for the 38,2%, this is a very clean bearish setup.

For a look at all of today’s economic events, check out our economic calendar.

New Zealand Central Bank Ends Bond Purchases, Paving Way for Possible Rate Hikes

The Reserve Bank of New Zealand (RBNZ) kept its official cash rate at 0.25% but cut short a NZ$100 billion ($70 billion) bond buying programme, prompting local banks to bring forward calls for a rate rise to as early as August, which would put New Zealand at the forefront of countries to raise interest rates.

“The RBNZ has absolutely done enough hand-waving today to tick the ‘market-prep’ box for an August hike, with CPI and labour market data set to do the rest,” said Sharon Zollner, Chief Economist at ANZ Bank.

The move comes amid nagging inflation worries globally, with U.S. inflation data rising by the most in 13 years in June, adding to uncertainty about whether such inflationary pressures are transitory.

New Zealand’s pandemic-free economy has been growing on the back of a housing boom and strong retail spending, raising concerns that it may get overheated pushing inflation above the bank’s target and squeeze the labour market.

First quarter GDP swept past forecasts, rising 1.6%. A survey last week showed the business outlook was now better than pre-COVID levels, and hiring constraints and inflationary pressures were starting to bite.

The RBNZ noted that in the absence of further economic shocks, consumer price inflation pressure is expected to build over time due to rising domestic capacity pressures and growing labour shortages.

“Members agreed that the major downside risks of deflation and high unemployment have receded,” the RBNZ said in minutes of the meeting.

“The (Monetary Policy) Committee agreed that a ‘least regrets’ policy now implied that the significant level of monetary support in place since mid-2020 could be reduced sooner.”

CHANGE OF TACK

A rate hike this year would make New Zealand the first developed economy to kick off policy tightening. The Reserve Bank of Australia said earlier this month that it did not expect a rate rise before 2024.

The New Zealand dollar rose 1.1% after the announcement to $0.7017. Yields on two-year bonds surged 9 basis points to its high for this year at 1.668%.

“The RBNZ has clearly changed tack to decide that the time for reducing monetary stimulus is very near. The risk of inflation and employment undershooting the objectives has switched to the risk of overshooting should the current level of stimulus remain in place,” said Nick Tuffley, Chief Economist at ASB Bank.

The RBNZ slashed its interest rate to record lows in March last year and pumped billions of dollars in stimulus as the COVID-19 pandemic raged through the country and the globe.

New Zealand, however, managed to contain the spread of the virus, with the last community case of COVID-19 reported in February, allowing the economy to bounce back faster than most others.

At its meeting in May, the RBNZ had hinted at a hike in September 2022.

For a look at all of today’s economic events, check out our economic calendar.

($1 = 1.4253 New Zealand dollars)

(Reporting by Praveen Menon; Editing by Richard Pullin)

Euro Drops Like a Rock

Major indices are still pushing higher. Nothing has changed here.

We have a small change on Gold though, where after some time, we finally see a commitment in the bullish camp. The price created the double bottom formation and is heading higher after the breakout of its resistance.

We do not have a lot of trading occasions today but those which are present are pretty strong. Interestingly, all of them have to do with the Euro.

The EURUSD slowly but surely finished the right shoulder of a Head and Shoulders pattern.

The EURGBP is still to dropping after a false bullish breakout from the wedge formation.

The EURNZD has also dropped showcasing the power of a false breakout pattern.

For a look at all of today’s economic events, check out our economic calendar.

USD Is Giving Up the Latest Gains

The SP500 is in all-time-highs. Nothing to see here, let’s move on.

The Dow Jones is inside a flag formation, close to all new all-time-highs.

Gold is possibly trying to create the right shoulder of the inverted Head and Shoulders patterns, but it may only be wishful thinking.

The EURUSD on the other hand is definitely drawing a right shoulder.

The EURCHF is heading higher and aiming for the upper line of the flag, after a bounce from an ultra-strong support.

The GBPUSD is in bouncing from a crucial horizontal resistance, continuing the negative sentiment.

The EURGBP is inside a falling wedge pattern, a breakout to the upside quite probable.

The EURNZD has continued to drop after a false bullish breakout.

The GBPCHF, on the other hand, is in a fresh false breakout pattern with a great potential for a further huge slide.

For a look at all of today’s economic events, check out our economic calendar.

EUR/NZD Testing 38.2%-50% Fibonacci Resistance on Daily and 1H Charts

The EUR/NZD is building a bullish corrective pattern. The bear flag pattern usually indicates a downtrend continuation.

Today’s analysis analyses the EUR/NZD on the daily chart and 1 hour as we examine potential short trade setups.

Price Charts and Technical Analysis

EUR/NZD 31.5.2021 daily chart

The EUR/NZD seems to be in a strong downtrend. The bearish price swing is expected to be a wave 3 (pink):

  1. The pullback seems to be an ABC (pink) correction in wave 4 (grey).
  2. The second breakout below the 21 ema zone could indicate the end of the wave 4 (grey) pullback.
  3. A break (orange arrow) below the support trend line (green) would be the next confirmation.
  4. A deeper pullback to the 50% Fibonacci level is expected to act as resistance and a potential reversal.
  5. A break above the 50% Fib places this wave outlook on hold (orange circle) or invalidates it (red circle).
  6. The main bearish targets are located at the round levels of 1.6250, 1.60, and the -27.2% Fib target at 1.5860.

On the 1 hour chart, price action seems to be preparing for a bearish breakout but the wave 4 (grey) could extend into a triangle pattern:

  1. Price action could have completed a bullish ABC (orange) in wave 4 (grey).
  2. But the wave 4 could also extend sideways via a larger ABC.
  3. A bullish break above the 50% places the bearish outlook on hold (orange circle) or invalidates it (red circle).
  4. A bearish breakout (orange arrow) could indicate a downtrend continuation. But a break of the bottom is needed as well later on.

EUR/NZD 31.5.2021 1 hour chart

Good trading,

Chris Svorcik

The analysis has been done with the indicators and template from the SWAT method (simple wave analysis and trading). For more daily technical and wave analysis and updates, sign-up to our newsletter

For a look at all of today’s economic events, check out our economic calendar.

Terrible Month for USD but Maybe the Last Day Will Be Better

Gold attacked a crucial support again but this time with a very sharp fall.

Brent oil initiated a bearish correction.

The Dow Jones is still in a pennant waiting for a breakout.

The DAX is still in a rectangle pattern also patiently waiting for a direction.

The EURUSD has started a bearish correction.

The Canadian Dollar is still going stronger.

The EURAUD is in a symmetric triangle waiting for a breakout.

The AUDCHF is in a similar situation.

The EURNZD is also waiting to end the sideways trend but in this case, the price is locked inside of a rectangle.

The AUDJPY defends a crucial support level after the bullish breakout from the triangle. It’s an interesting opportunity in terms of risk to reward ratio.

The ZARJPY defends the neckline of the head and shoulders formation.

The USDHUF is in a long-term sell signal after the price drops below the major support.

For a look at all of today’s economic events, check out our economic calendar.

EUR/NZD Strong Bullish Momentum Aims at 1.70 Targets

The EUR/NZD made a strong bullish bounce at the 50% Fibonacci retracement level. The bullish breakout above the resistance trend lines (dotted orange) indicates more upside.

This article will review the EUR/NZD price patterns and targets, but also why this particular currency pair offers the best charting opportunities this week.

Price Charts and Technical Analysis

EUR/NZD 7.4.2021 4 hour chart

The Euro seems posed to be one of the strongest currencies this week with impressive gains against the USD, GBP, and AUD while keeping in balance with the JPY.

On the other hand, the NZDis mostly on the losing end versus the USD and AUD. With EUR strength and NZD weakness, the EUR/NZD seems ready for more upside:

  1. The EUR/NZD chart itself seems to have completed an ABC (purple) correction at the 50% Fibonacci support level.
  2. The larger picture remains unclear, whether price action is building an ABC or 123 (red)… But in both wave scenarios, more upside seems likely.
  3. The strong breakout followed by a push above the Fractal resistance is confirming a push higher.
  4. The intermediate main target is the 610 ema followed by the WIzz 7 level. These levels could create a bull flag chart pattern (grey arrows).
  5. A bullish breakout above the flag patterns should send the pair higher. The main targets are located at 1.70, 1.71 and 1.7170.
  6. Price remains in an uptrend as long as it stays above the support zone (blue box). A break below the support trend line (green) indicates a deeper retracement (dotted orange lines) towards the 31.8% Fibonacci level.

On the 1 hour chart, the bears have lost control and the bulls seem posed to push price up higher soon:

  1. The divergence pattern between the lows (purple line) has confirmed a reversal.
  2. Price action has broken above the long-term moving averages.
  3. The price action is showing strong momentum to the upside.
  4. A corrective pattern respected the 38.2% Fibonacci level and bounced back up.
  5. The corrective pattern saw a bullish breakout.

The bulls could push immediately higher. This offers potential on intra-day or intra-week time frames for more upside.

Eventually a retracement is expected. A bull flag pattern (grey arrows) followed by a breakout could indicate more upside.

7.4.2021 EUR/NZD 1 hour chart

Good trading,

Chris Svorcik

The analysis has been done with the indicators and template from the SWAT method (simple wave analysis and trading). For more daily technical and wave analysis and updates, sign-up to our newsletter

For a look at all of today’s economic events, check out our economic calendar.