NZD USD Still in Position to Reverse Weekly Chart to Down

After yesterday’s bearish news regarding the future of New Zealandinterest rates, the Kiwi has rebounded nicely in an attempt to finishhigher for the week.

Intraday Analysis

NZD USD

After yesterday’s bearish news regarding the future of New Zealand interest rates, the Kiwi has rebounded nicely in an attempt to finish higher for the week.

Yesterday the Reserve Bank of New Zealand announced the possibility that it would lower interest rates again if conditions warranted.  This surprised traders and the NZD USD sold off.  Today’s action seems to be reflecting the thought that yesterday’s break may have been overdone to the downside.

Another scenario is that the RBNZ news was indeed bearish but came as such a surprise that the bigger traders were not allowed to short this market properly.  This means that today’s rally will eventually be met with heavy selling before the end of the session.  A sharp break in the U.S. equity markets may also encourage selling.

Technically, a close under .6554 will form a weekly closing price reversal top.  If this occurs then a follow-through to the downside next week will trigger a 2-3 week break.

James A. Hyerczyk has been actively involved in the futures markets since 1982. He has worked in various capacities within the futures industry from technical analyst to commodity trading advisor. Using W. D. Gann Theory as his core methodology, Mr. Hyerczyk incorporates combinations of pattern, price and time to develop his daily, weekly and monthly analysis. His firm, J.A.H. Research and Trading publishes The Forex Pattern Price Time Report... More

Disclainer: