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.
EURUSD daily chart
Slide #1 – NZDUSD
- Picture for NZDUSD is not so immediately obvious since NZDUSD is one of stronger majors recently and steeply uptrending since 2 weeks.
- 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.
- 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).
- 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).
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.
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"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."