Short term
Trade view / 19 September 2016 at 0:30 GMT

NZDUSD downside potential ahead

Managing Director / Technical Research Limited
New Zealand

The USD found a bid on Friday after the Consumer Price Index came in a little higher than expected. The background to this is here (link to Friday's article).

We now wait to see what the Fed makes of it all mid-week. The Reserve Bank of New Zealand will also hold a monetary policy review meeting on Thursday morning local time.

Market pricing suggests only a 10% chance of a rate cut and commentary is dovish.

Management and risk description

From an Elliott Wave perspective, I am still interpreting the Kiwi’s advance from its 0.6235 low of last September as a “Double Three” corrective structure (refer daily and weekly charts below).
In the short term, resistance is at 0.7300/0.7330 and while this contains yields, sell-off below 0.7250/0.7235 support is toward the 0.7170 and 0.7100 levels, en route to 0.6985/0.6950 over the coming days (refer daily chart below).


Entry: Kiwi is seen as a sell at 0.7290/0.7305 today.

0.7332, initially.

50% at .7113 and 50% at .6990.  

Time horizon:
Allow a few weeks. 

NZDUSD daily chart (click to expand)
NZDUSD daily chart
Source: ThomsonReuters  

NZDUSD Weekly chart (click to expand)
NZDUSD Weekly Chart
Source: ThomsonReuters  

— Edited by Adam Courtenay

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Non-independent investment research disclaimer applies. Read more
19 September
TheNomad TheNomad
"Critics also warn the Wave Principle is too vague to be useful, since it cannot consistently identify when a wave begins or ends, and that Elliott wave forecasts are prone to subjective revision. Some who advocate technical analysis of markets have questioned the value of Elliott wave analysis"
19 September
Max McKegg Max McKegg
Yes the EWP is indeed Subjective (to a point) and I utilise this in conjunction with classical charting as well. Remember, there is "no holy grail" to forecasting and trading the markets!
19 September
Michael Liu Michael Liu
Hi Max, I followed this strategy, hope we can make some money. LOL
19 September
Max McKegg Max McKegg
Ozzy has just rallied above Key .7525 resistance (for Today) and this flashes a Warning sign to me so not prepared to persist with this Trade iidea today any longer .. Closing Out (minimal loss) to re-evaluate tomorrow.


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