Daily Market Report – NZDUSD false breakout? July 18, 2017

NZD/USD signalling an exhaustion

Price dropped aggressively and looks determined to erase the last day’s gains, but is premature to say that we’ll start another leg lower. The current decrease is natural after the last week’s rally, we’ll see what will happen in the upcoming days because the perspective remains bullish at this moment despite a minor decrease.

Has dropped as the USDX has tried to rebound in the fresh start of the week, unfortunately the index is still under massive selling pressure, so we’ll have to wait for a reversal signal before we could say that we’ll have another leg higher.

USDX found support right above the 95.00 psychological level, at 95.05 level, but we could still drop if the United States data will come in worse than expected. A further USDX’s drop will send the greenback much lower versus its rivals.

Price dropped after the failure to reach the 0.7367 previous high, is trading below the 0.7324 static resistance and could drop to test and retest the 0.7277 and the warning line (wl4) in the upcoming days if the dollar index will have enough energy to climb higher.

NZD/USD is showing some exhaustion signs after the failure to reach the 0.7375 swing high, but maintains a bullish perspective after the false breakdown below the red downtrend line.

Is bullish as long as is located above the fourth warning line (wl4) of the former ascending pitchfork, only a valid breakdown below this level will open the door for a larger drop.

We may have a buying opportunity if the rate will test and retest the mentioned support levels because the pair is still located in the buyer’s territory.

The greenback will appreciate significantly only if the USDX will find strong support and if will breakout from a potential Falling Wedge pattern. The Kiwi could receive support from the New Zeland CPI, which could increase by 0.2% in Q2.

AUD/USD focused on correction

Price found strong resistance and now is going down on the short term, the retreat is natural after the amazing rally. The correction could be temporary as the rate will come down only to recapture more directional energy to be able to resume the upside movement.

AUD/USD failed to reach and retest the upper median line (uml) of the ascending pitchfork, so the retreat is understandable. Failed also close above the 0.7835 major static resistance, showing that the bulls are too exhausted on the short term. The next downside level will be at the median line (ml) of the ascending pitchfork, could hit also the 0.7755 static support (resistance turned into support).

GOLD still in range

The yellow metal continues to move sideways on the Daily chart, so will be better to stay away till we’ll have a valid breakout from this range. The rebound is natural after the false breakdown below the 50% retracement level and after the failure to reach and retest the median line (ml) of the minor descending pitchfork. Is trading above the 1233 level, targeting the upper median line (UML) of the major descending pitchfork and the upper median line (uml) of the minor descending pitchfork.

By Olimpiu Tuns

Market Analyst

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