Hike or not, these 2 forex pairs suggest USD strengthening

As I discussed yesterday, there are reasons to indicate an interest rate hike (log-in required) this week. Overall vibes with markets going into risk-off i.e. stock indices falling, JPY crosses at all time low, supports this observation.

These two slides I showed to IG crowd at my monthly ‘Forex du jour’ event certainly favours USD strengthening even if there is no hike.

 

Slide #1 – EURUSD

Bearish expansion that signals EURUSD weakening.

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EURUSD daily chart

 

Slide #1 – NZDUSD

  1. Picture for NZDUSD is not so immediately obvious since NZDUSD is one of stronger majors recently and steeply uptrending since 2 weeks.
  2. Note however when a channel is near flat (blue), it is more unlikely to be a consolidation. Read in line with previous year to year down trend by zooming out and it becomes more like a bear flag.
  3. In addition with H1 ’15 former support, top of parallel channel and Apr-May high as potential resistance, bulls will have to fight a formidable resistance zone (orange).
  4. Failing to break higher will leave last week’s spike as a wash n rinse and the downside uncluttered and definitely more compelling (if it can reach bottom of channel).
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NZDUSD weekly chart

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Soh Tiong Hum is Director of TerraSeeds Market Technician Pte Ltd. TerraSeeds is a trading educator in Singapore since 2005.   Soh's Twitter account @sohtionghum was ranked #23 out of The Top 70 Twitter Accounts To Follow In 2015 by MahiFX.   Disclaimer notice: "I do not have a financial advisor's license. I am not qualified by any regulator to give financial advice. I do not know you the reader. Your investment means and motive may be different from me. My posts here are based on observations and meant for education. I am not responsible for for any consequence from your actions."
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