In light of the recent price action, NZD/USD is now posed for some consolidation,
suggested FX Strategists at UOB Group.
24-hour view: “Expectation for NZD to trade sideways was incorrect as it dropped to 0.6241 before rebounding strongly.
Downward pressure has dissipated and the 0.6241 low is not expected to come into the picture for today. That said, a sustained rise in NZD is not expected as it is more likely to consolidate and trade sideways, likely between 0.6260 and 0.6305”.
Next 1-3 weeks: “Our expectation for NZD to “edge higher to 0.6375” from Monday (14 Oct, spot at 0.6330) was incorrect as NZD dropped below the strong 0.6270 support yesterday (low of 0.6259).
The current price action is viewed as part of an on-going sideway-trading phase and NZD could trade in an ‘undecided’ manner and within a 0.6235/0.6355 range for a period”.
USD/CAD Murrey Math Lines
Our preference: long positions above 1.3190 with targets at 1.3240 & 1.3260 in extension.Alternative scenario: below 1.3190 look for further downside with 1.3165 & 1.3145 as targets.
USD/CAD, “US Dollar vs Canadian Dollar”
As we can see in the H4 chart, USDCAD has rebounded from the strong support at 0/8. In this case, the pair is expected to resume growing to reach the resistance at 3/8. However, this scenario may no longer be valid if the price breaks 0/8. After that, the instrument may continue falling towards the support at -2/8.
NZD/JPY giving back ground in holiday thin markets
Our preference: the downside prevails as long as 68.22 is resistance.Alternative scenario: the upside breakout of 68.22, would call for 68.42 and 68.54.
NZD/JPY profit-taking ensures at the start of a busy event week.Less committed risk-takers prefer to wait and see how the trade deal unfolds.
NZD/JPY has started out the week on the back foot, falling from a high of 68.72 to a low of 68.22, -0.66%.
The cross is suffering on what is potential profit-taking and a dial back in optimism surrounding the ‘phase-1’
trade agreement between the US and China within illiquid markets while Japan and the U.S. are out on holiday. The Chinese press has somewhat invalidated the trade agreement between the US and China by highlighting that only a ‘partial deal’ has yet to be inked, thus leaving the door open for scrutiny and prying the implications of a possible reneging from either side on aspects of the agreement
AUD/JPY Trade Headline Hype Sees Risk Spike – SPX
Our preference: the upside prevails as long as 72.47 is support.
Alternative scenario: below 72.47, expect 72.25 and 72.12.
China has “lowered expectations” for progress from this week’s trade talks. That shouldn’t come as too much of a surprise, given the US added 28 Chinese companies to their blacklist yesterday.
There’s also reports that China would cut the scheduled 2-day trade talks early by one day. On the upside, reports suggest that the Trump administration may allow US companies to supply non-sensitive goods to Huawei,
and that the US may delay next week’s tariff hike. And today,
the US is reconsidering currency pact which would ensure China don’t engage in competitive devaluation of the Yuan. Personally, I do not see China agreeing to this. Yet markets took it as a positive step and saw risk assets such as E-mini SP500 futures and AUD/JPY spike higher.
DUP rejects EU concession on time-limited Irish backstop – GBP/USD pressuredOur preference: short positions below 1.2260 with targets at 1.2195 & 1.2170 in extension.Alternative scenario: above 1.2260 look for further upside with 1.2290 & 1.2300 as targets.
The Northern Irish Democratic Unionist Party (DUP) has rejected the EU’s concession on Brexit. The bloc has reportedly offered to allow the assembly in Stormont to unilaterally revoke the Irish backstop.
However, according to a report in The Times, it would require both communities in the conflicted province to agree.
Sammy Wilson, the DUP’s Brexit spokesman, said:
It will go nowhere. The Govt in Westminster will not accept it, we will not accept it, I don’t think anyone who looks at it with any kind of objectivity at all will say it’s an improved offer
Prime Minister Boris Johnson’s Conservative Party relies on the DUP and the PM’s original proposal received the small party’s backing.The rejection may undermine the chances of the EU’s idea to serve as the basis for a deal.
Intra-Day News and Views & data to be released today – GBP/USD
Our preference: short positions below 1.2315 with targets at 1.2265 & 1.2240 in extension.Alternative scenario: above 1.2315 look for further upside with 1.2335 & 1.2355 as targets.
Intra-Day Market Moving News and Views
Update Time: 08 Sept 2019 04:30GMT
GBP/USD – 1.2294… The British pound recovers in Asian trading after yesterday’s roller-coaster ride. Although cable edged up to 1.2336 in New Zealand, price met renewed selling and fell to an intra-day low of
1.2288 in European morning on Brexit news before rebounding to 1.2333 ahead of New York open but only to retreat in tandem with euro to 1.2290 near the New York close due to usd’s strength.
Despite euro’s corrective rise from last Tuesday’s 3-week trough at 1.2205 to as high as 1.2413 on Thursday, subsequent selloff to 1.2276 Friday suggests temporary top is in place and yesterday’s sideways swings would yield consolidation before prospect of another fall but below 1.2227 needed to bring re-test of 1.2205.Offers are tipped at 1.2305/10 with more above and stops above 1.2360 while bids are noted at 1.2265-60 with stops below 1.2230.
USD/CAD Analysis could fall today
Our preference: long positions above 1.3300 with targets at 1.3345 & 1.3365 in extension.Alternative scenario: below 1.3300 look for further downside with 1.3280 & 1.3265 as targets.
The US Dollar continued to range between the 1.3345/1.3296 region against the Canadian Dollar on Friday. The currency pair tested the 50– hour simple moving average during the morning hours of today’s trading session.
As for the near future, the USD/CAD exchange rate might aim at a support level formed by the 200– hour simple moving average at 1.3273.
If the support level holds, the currency exchange rate will most likely continue its upside movement within this session.
Furthermore, technical indicators suggest that bullish traders might continue their dominance in the market today.
USD/CAD technical analysis: Bulls step back from 4-week high
Our preference: long positions above 1.3290 with targets at 1.3345 & 1.3375 in extension.Alternative scenario: below 1.3290 look for further downside with 1.3265 & 1.3235 as targets.
Failure to hold a four-month-old trend-line breakout pulls USD/CAD back.
Sellers can recall 200-day SMA on the downside break of resistance-turned-support.
USD/CAD struggles to extend its latest upward trajectory while taking rounds to the near-term
falling trend-line as it trades close to 1.3330 amid the initial Asian session on Thursday.
Sellers await a clear break below resistance-turned-support-line, at 1.3320, in order to target 1.3295/90 area including 200-day simple moving average (SMA) and 50% Fibonacci retracement of May-July downpour.Should prices decline below 1.3290, 1.3200 and September month low nearing 1.3130 could become bears’ favorites.
On the contrary, 61.8% Fibonacci retracement level of 1.3355 and another falling trend-line since June 18, at 1.3365, could offer additional challenges to the buyers ahead of pushing them towards September month high of 1.3384 and late-June top surrounding 1.3434.
EUR/USD pressured above 1.09 ahead of ADP NFP
Our preference: long positions above 1.0965 with targets at 1.1000 & 1.1020 in extension.Alternative scenario: below 1.0965 look for further downside with 1.0955 & 1.0940 as targets.
EUR/USD is trading above 1.09, off the lows. Weak ISM Manufacturing PMI and disappointing auto
sales weigh on the dollar as odds of a rate cut have risen, ADP NFP is due out shortly.
EUR/USD Forecast: Downtrend channel pointing to falls as European matches the US in miserable prospects
US ADP Employment Preview: Beware negative trends
AUD/USD Analysis: declines after RBA statement
Our preference: short positions below 0.6720 with targets at 0.6685 & 0.6670 in extension.Alternative scenario: above 0.6720 look for further upside with 0.6730 & 0.6745 as targets.
The Australian Dollar has depreciated about 0.99% in value against the US Dollar since Monday’s trading session. The currency pair tested the lower boundary of a descending channel pattern at 0.6701 during the Asian session on Tuesday.
The exchange rate is currently trading near the bottom border of the descending channel pattern.If the lower band of the channel pattern holds, a brief retracement towards the weekly S1 at 0.6732 could be expected today.
However, if the currency exchange rate breaks the descending channel pattern, bearish traders would continue their dominance in the market today.