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Price spikes that reveal something of these 3 currency pairs

Price spikes reveal a wealth of information

In this previous article, we wrote that spikes reveal the effective price levels that market participants are looking at as well as the maximum power of bulls and bears. We had a number of price spikes in currency pairs last night so what can we tell from the tails?

 

EURAUD monthly chart

  1. EURAUD is resisted by a 15-year trend line drawn from 2 points.
  2. That spike was clearly a dash in the predominant trend but despite a nearly 500 pip break, price is back at the trend line.
  3. At the moment, price is above the trend line on the daily chart. It would serve traders to inspect carefully for any continuation or reversal chart. If there is a continuation, all’s well. If there is a bearish reversal, then that mad dash was merely a false break.
EURAUD resisted by trend line on monthly chart

EURAUD resisted by trend line on monthly chart

 

GBPNZD and AUDNZD charts

How about GBPNZD and AUDNZD? What can observe from them?

GBPNZD spike reveals potential resistance

GBPNZD spike reveals potential resistance

What does AUDNZD spike reveal about this level?

What does AUDNZD spike reveal about this level?

 

Bears won in all 3 currency pairs. But since we know that these spikes were caused by a massive risk-off event when US stock indices crashed and which subsequently recovered with the indices, there is a little titbit here to think about:

  1. EURAUD risk-off – run towards EUR.
  2. GBPNZD risk-off – run towards GBP.
  3. AUDNZD risk-off – run towards AUD.

Does this mean in a risk-off event, NZD is a hot potato that no one wants?

Director, TerraSeeds Market Technician Pte Ltd. Trader, investor. @sohtionghum was picked ‘Top 70 Forex Twitter in 2015’.

“Dear reader, I do not have a financial license to give advice. I do not know you the reader. Your financial objective and risk tolerance may be different from mine. I am not responsible for any consequence of your action.

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One thought on “Price spikes that reveal something of these 3 currency pairs”

  1. Benson Ang says:

    Mr soh, thanks for the review here on the various spikes yesterday.
     
    After yesterday session i was quite stunned like VEGE and don’t know which pair to FOCUS on.
     
    I manage to grab GBP/NZD retracement at 61.8% FIBO pricing at key resistance turn support, 2.4040 after it SHOOT up 1800 pips Yesterday session.
     
    Is market pricing in another rate cut by AUD, CAD & NZD central banks next month?
    Cos sept 1 RBA rate review / Sept 9 BOC rate review / Sept 10 RBNZ rate review.
     
    Or its just flight to quality towards EUR & GBP during crisis?
     
    Pairing strong & Weak commodities currencies have been a good strategy this year.
     
    But now, which pair will u favour in terms of current market?
     
    GBP pair or EUR pair against (AUD/CAD/NZD) ???????
     
    USD is not as resilient at the moment due to sluggish rate hike expectation.
     
    Can we have a post on this Mr Soh =) Really need some guidance after this spiking effect.
     
    However, i think ECB won’t allow EUR to be so strong this year cos they are still doing QE printing $$ which defeats their purpose of keeping EUR down to boost biz competitiveness & export as well as spur inflation target rate 2%.
     
    As we can see EUR has been making new 52 weeks high against SGD, AUD, NZD, CAD & USD & is now retracing back 50% fib0. The retracement as compared to GBP is faster and more furious, which makes me think the reliance of EUR. I think we need to allow market to digest & consolidate a while on the EURO pairs before taking further action on LONG set up.

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