Article by ForexTime
New Zealand dollar traders are looking at the future eagerly after some recent downward pressure on the currency. Previous bulls runs for the NZDUSD have come under pressure after the recent resurgence in the USD over the last few days, as a strong US JOLTS opening report came in at 6.16M (5.75M exp). This has indeed turned the USD bulls back into a serious contender, however I still feel that it may not be the resurgence that many had expected. For the NZD traders there is still a big week ahead with NZ interest rate statement due out in the next trading day and expectations are building that it will be held at 1.75%, however the Reserve Bank of New Zealand may look to talk up the fortunes of further rate rises. What seems a little more likely though is that it will take a swipe at the NZD in an order to try and bring it down to size – it has always been a common strategy for commodity currencies with such open markets.
NZDUSD traders have benefited greatly recently from the market movements and the bullish momentum it had. However, after failing at the 0.7555 mark, the market in turn lost momentum and started to trickle lower before the bears kicked off a strong selling spree. Expectations were strong that the trend line on the daily chart may be able to hold off against their onslaught, but it certainly was not the case and the trend is very much bearish in this instance. Right now the bulls are trying to gain some ground back at support around 0.7323, however if this fails I would expect the bears to take control and look to push 0.7238 and the psychological level at 0.7200. Either way the trend is your friend and right now it’s very much in favour of the bears in this new trading week.
Oil traders have also been one to watch in the last few weeks, as US crude drawdown’s have been weaker than expected and OPEC threats of even lower production have not wavered the bears resolve. Reports recently have said that Libya is looking to further increase production in an effort to bolster its economy, couple this with private data due out today showing not a very big drawdown of -7.8M barrels, while a jump in Gasoline to +1.5M barrels and you can see that the bears are fundamentally positioned strongly. As a result, traders will be closely watching the Department of Energy results due out tomorrow to see if there is any chance of the bulls coming back into the market.
For myself looking at oil it’s currently stuck in a lurch as it looks for direction again, and we are seeing consolidation patterns on the shorter time frames. Resistance at 50.21 looks to be the magic area where oil is hesitant to look above, so support levels at 48.46 and 47.25 are likely to be key targets if the bears continue to look to strike. However, in the long run we’ve seen aggressive waves higher but the fundamentals are not backing up a move above 50 just yet.
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Article by ForexTime
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