Steen Jakobsen
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Short term
Trade view / 22 August 2016 at 0:26 GMT

NZDUSD: Kiwi’s recovery potential remains

Managing Director / Technical Research Limited
New Zealand

The Northern hemisphere markets are deep into their summer slumber and it's a quiet week for data down under as well.

So NZDUSD will be driven by flows in the next few days with the biggest potential for movement coming on Friday when Federal Open Market Commitee chairman Janet Yellen speaks at Jackson Hole.

Traders will be interested to hear whether she backs up some of the bullish commentary we saw last week from her colleagues, a couple of whom suggested the September 20-21 Fed meeting was “in play” for a rate hike.

Markets are not giving the comments much credence at this stage. In the meantime, the path of least resistance for NZDUSD is up as seen here.

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 developing “Double Three” corrective structure (refer daily and weekly charts below).

This still gives potential for the Kiwi to extend its recovery toward mathematical resistances about the 0.7500 and 0.7570 levels (see daily chart).

In the short term, support at 0.7200/0.7170 probably holds, as corrective consolidation gives-way to the next rally onto the mid 0.7400’s.


Entry: Kiwi is seen as a buy today at 0.7240/0.7215

0.7067, initially

50% at 0.7460 and 50% at 0.7558 

Time horizon:
At least 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
23 August
Ali Baba Ali Baba
trade doing well so far. thanks


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