The past week was very good to the kiwi after the Reserve Bank of New Zealand announced interest rate raises and investors are pricing in another 25 basis point hike making a 50 bp move seem more likely according to SeekingAlpha. CPI ran higher than expected this quarter at 2.2% with the expected 1.5%.
A higher CPI could also mean that it is even more likely that the RBNZ will go for a bigger rate hike next year. Because of this, we're already seeing the pair getting this news priced in for what could happen. Although the kiwi had an aggressive move this past week, it still looks strong across the board. And against the Canadian loonie, it looks relatively undervalued.
NZDCAD had a strong four trading days and looks to be continuing the move at the beginning of this week. Price is nearing resistance around 0.88200s which is also paired with the 50-day moving average on the 1D chart. Clean support lies below around 0.86200s. If momentum keeps up, we could see a test on the resistance level above which is about a sixth of a percent move away.
NZDJPY skyrockets this morning 1.16% on the trading day moving more in a week than it has in several months. This recent jump in buying came from the Reserve Bank of New Zealand announced that they will raise rates four times in 2022 while Japan has yet to declare an interest hike.
Although price has jumped over 4% in the past week, there is still potential for the pair to continue making gains. We have been expecting an announcement like this since the summer time when the RBNZ was talking about sooner-than-expected hikes more so than most countries' national banks. The problem now is to watch out for FOMO buying here since price has risen at a much higher rate than expected. I definitely think price can continue to run, but I think we have to start expecting a retrace here soon.
NJ tears above all resistance and hits a high for the year of this strong fundamental news. Price broke resistance at 80.193, and a close above this level will be promising that for the bullish investors. A close above this level will likely mean more stability up at this price as breaking a yearly high could serve as very clean support.
Let's look at the news event's we've got lining up this week...
Every month, the Organisation of Petroleum Exporting Countries (OPEC) and the Joint Ministerial Monitoring Committee (JMMC) have a meeting to discuss the outlook of Oil and its performance. OPEC aims to control the price of oil by adjusting supply volumes. If its members want to increase the price of oil, they can revise their production quotas downwards to limit supply.
It's rumoured that the oil production companies are considering bumping up production again. Crude oil continues to trade at record highs and demand is expected to hang. Remember, the OPEC already agreed to increase output by 400k barrels per day until the end of the year, so another bump higher could push the commodity to new highs!
No changes to the monetary policy are expected from the Reserve Bank of Australia for now. In their previous decision, they already started to taper asset purchases but also decided to extend the program for another three months. Data from the Land Down Under has been mixed, with jobs figures turning out weaker than expected, so policymakers would likely sit on their hands.
The Reserve Bank of New Zealand is widely expected to announce an interest rate hike from 0.25% to 0.50% in this week's statement. Economic data has been mostly positive, with the latest GDP and inflation figures beating expectations, so there's no reason for the RBNZ to delay tightening this time.
It will be interesting to see if the central bank will follow through with another interest rate hike in November, considering the first hike has already been priced in a while back.
Following the disappointing August report of an increase of 235k, way below expectations, for the month of September, employment is projected to increase by 490k, bringing the unemployment rate down from 5.2% to 5.1%
Leading indicators due throughout the week include the ISM Services PMI, which is expected to fall from 61.7 to 59.9, and the ADP report which is expected to show a 455k gain.
Hey everyone! Welcome to this week's forex forecast for the week ending October 1st, 2021. I'm TraderBart with A1 Trading, and this week I'll be looking at USDJPY, GBPUSD, GBPNZD & XAUUSD.
Price closed off for the week just above the resistance at 110.6 in this range bound market. Look out for how price reacts to this level, whether we see further bullish momentum continue pushing price higher, or if we see price retrace it's move and reject off the resistance, or if we see price fall back below the resistance and once again confirm the level as continued resistance as price heads back lower again, filling the gaps it's left behind.
We saw price reverse off the daily order block at 1.361 and is showing signs of a retracement to that move. Look out for how price reacts to the same order block, and if it will act once again as an area to go long off. If we see price push below this will turn this zone into a breaker block, an area to go short off.
Price continuing to consolidate in the middle of this range between 1.92-1.97. Look out for a clear break outside the short-term key levels acting as support and resistance which are 1.935 and 1.955. If price breaks above 1.955 it's likely we'll see further movements towards the breaker block at 1.97 whereas if we see price break below 1.935 it's likely we'll see price push towards 1.92.
Price is currently sitting inside the bullish order block and we're now waiting for a catalyst to push price outside the OB. If we see price continue going lower and break below the zone, this zone will become a breaker block, an area to go short from. Currently, in the short-term, we are seeing a descending channel form in the past couple of weeks, and hence unless price forms a new trend, a breaker block situation will be likely.
Hey everyone! Welcome to this week's forex forecast for the week ending September 10th, 2021. I'm TraderBart with A1 Trading, and this week I'll be looking at EURUSD, GBPUSD, GBPNZD & XAUUSD.
Price has closed off for the week in the bearish order block just underneath 1.19, and we're now waiting on further moves to take place, to establish whether price will either respect this zone and reverse or continue breaking higher from the descending channel it has just broken out of. Most retailers by this point have been stopped out who went short at the channel's top and are likely going to go long now; however financial institutions usually reverse once more and head back towards the original position.
Price is back once again at this 1.388 key horizontal level which has been seen as clear support and resistance over the past couple of weeks. I made a deep dive on this pair as price was forming the descending triangle, and now that price completed that pattern move, price is now once again back at this level and just under its resistance. If price manages to break higher, we should wait for a confirmation of a retest before going long.
Over the past couple of months, price has been consolidating around this breaker block between 1.96 - 1.98 and we're finally beginning to see a break out of this zone. Price is currently heading towards the previous resistance and new support level from the ascending triangle at 1.92, and liquidity is likely pulling price towards this level. There is an order below where price will likely head to swell to stop out retailers who will go long early before potentially reversing.
Price has closed off for the week just below the resistance in this consolidation zone I've been pointing out between 1800-1835. We're now waiting on clear confirmations whether price will either respect of break this level and if we see a break of this trend. If price closes above 1835, we'll likely see price head higher towards the liquidity void ant around 1890. If price does in fact respect this level and go below, we'll likely see further consolidation on this pair.
Hey everyone! Welcome to this week's forex forecast for the week ending September 3rd, 2021. I'm TraderBart with A1 Trading, and this week I'll be looking at NZDCHF, GBPJPY, GBPNZD & XAUUSD.
Price is now sitting at the descending channel's top and traders are likely waiting on confirmation of either a rejection for a reversal towards the bottom, or price to break out, retest and continue heading higher. There is mixed retail sentiment at the moment, with 57% traders short currently, it's likely we could see price head higher to stop out traders early.
Price is currently consolidating near the channel's bottom and traders are now waiting on confirmations where price could be heading next. A close below the bottom could signify price possibly heading lower, and if price continues to stay inside the channel it's likely we could see price head towards the top in the long run.
Price is looking like it's going to exit the bullish breaker block and possibly head back down towards the key horizontal level around 1.92. If price does make a clear close outside the block, then this could likely happen. If price continues to stay inside, we could potentially see price make the next high again, and going long from this zone wouldn't be a bad idea.
Price is currently back inside the same zone we saw consolidation back in July between 1800 and 1835. A clear break above this level would suggest price is heading higher and if price does close below 1800, we could see price head back inside the channel again.
Let's look at the news event's we've got lining up this week...
The USD Retail Sales Report is set for Tuesday which shows the total value of sales at a retail level. Consumer spending accounts for a majority of economic activity, and therefore when citizens spend, it is a sign that people have jobs, people are making money, and people are able to spend money for whatever it is they want.
Analysts expect to see a 0.2% decline in the USD Retail Sales compared to the previous month at 0.6%. The Core reading is expected at a minor 0.2% increase after the previous reading at 1.3%. This report will likely paint a mixed picture of consumer spending, so I suggest looking at the data once released before making any trading decisions.
This week, all eyes are on the RBNZ as the central bank is widely expected to hike rates from 0.25% to 0.50%. These hawkish expectations are supported by stronger than expected quarterly inflation and employment figures, as New Zealand has been weathering the pandemic far better than any of its peers. Keep in mind that the RBNZ has already committed to scaling back its easing program in July, suggesting that policymakers are keen on keeping price pressures in check.
This release should shed more light on whether policymakers are shifting to a more optimistic stance or not. In their latest statement, the Fed refrained from giving a timeline for tapering asset purchases, citing that they need to see "substantial further progress has been made toward its maximum employment and price stability goals” before making adjustments".
The Employment Change report is a measure of the change in the number of employed people in Australia. Job creation is an important leading indicator of consumer spending, which accounts for a majority of overall economic activity. The number of unemployed people is an important signal of overall economic health because consumer spending is highly correlated with labour-market conditions.
Job creation is expected to decline by 46k in July after the previous month where we saw job creation of 29.1k. This might be enough to move the unemployment rate up to 5.0%.
Hey everyone! Welcome to this week's forex forecast for the week ending August 20th, 2021. I'm TraderBart with A1 Trading, and this week I'll be looking at EURUSD, GBPNZD, EURAUD & XAUUSD.
A bearish flag pattern has formed on E/U after a descending channel has formed following an impulsive selloff in mid-June. Price has recently hit the channel's bottom and is now more than halfway heading towards the channel's top. We have a bearish order block at 1.187, where we could likely see a reversal towards the bottom from this zone. Look out for price action confirmations once price does reach this zone, look out for rejections before going short.
Price has been consolidating around and within this bullish breaker block zone for months now, and no significant move has yet to be made. Price did form a medium-term ascending channel where it's currently at the bottom, and I'm now waiting on price action confirmations of a rejection and a move potentially to the upside. If price breaks this formation and goes lower, it's likely we could see a new trend form, or price may go to retest previous horizontal levels such as 1.92 or potentially collect orders from OB's lower.
Price has recently broken out of the short-term ascending channel and is potentially forming a new descending channel if price fails to go higher than 1.61, forming the new lower high. Price has been moving pretty slowly in this market, and no breakthroughs have happened. 1.585 is a pivotal level to watch how price reacts; a break lower suggests we could retest 1.568, whereas if price holds this level as support, price is likely to stay above, and long positions could be a good idea.
Gold made a huge move in the past week, dropping more than 5% and then retracing the entire move plus more by Friday. Price has closed off for the week just above the channel's top, and in-between two horizontal levels, I've had my eyes on 1765 and 1795. Look out how price reacts to this current level to decide whether to go long or short. If price stays above the channel's top, we could likely see price head higher towards and above 1795, whereas if price comes back inside the channel, it's likely we could see some consolidation in the zone at 1740.
Hey everyone! Welcome to this week's forex forecast for the week ending August 13th, 2021. I'm TraderBart with A1 Trading, and this week I'll be looking at GBPUSD, USDJPY, NZDCHF & XAUUSD.
Price is currently consolidating around this 1.387 zone which was seen as resistance in mid-July and now as new support in early August. If price continues to hold, we'll likely see price head towards the trendline once more before we eventually see a break. However, a break below this zone suggests continued downside movement, and an entry following a retest with continued bearish confirmations would be ideal. Remember, we did recently see a break of the long-term ascending channel, and hence we could be forming a new long-term descending channel.
Following the better-than-expected NFP news on Friday, we're seeing price potentially break out of this medium-term descending channel which was recently formed following the break of the long-term ascending channel. If price continues to stay above the channel's top, look out for a clear break, retest then enter with clear price action confirmations of a continued bullish move.
Similarly to U/J, price is at the top of this descending channel in the long-term bullish flag pattern. If price rejects this level and reverses towards the downside, a move to previous lows at 0.63 is expected, potentially 0.62 if we see further bearish confirmations. However, if we see price break out of this channel, we could likely begin to see price complete the flag pattern and head to new highs. An entry following a retest with continued bullish confirmations would be ideal at the channel's top.
Following Friday's NFP event, where we saw a huge improvement in US jobs, price did in fact fall 2.2%. Price has again gone underneath the long-term channel's top and is hovering around a key horizontal level at 1765. If price uses this level as support, we could see price reach lows at the bullish order block at around 1740; however, if price breaks this zone, we could see it tumble towards the psychological 1700 level. We could likely see further downwards pressure as Fed tapering bets grow following this strong NFP report.
The RBNZ announced a sooner-than-expected raise in interest rates to happen this month instead of late 2021. NZD's unemployment rate also beat expectations by 0.4% at 4% unemployment, and employment change went to 1%, 0.3% higher than expected meaning that more people gained jobs in the labor force than expected. Australia continues to suffer in the short term with their extended lockdown until Sunday and their short term economic slowdown.
With very clear and bullish news on the kiwi paired with bearish economic news on the buck, The AUDNZD pair looks like an obvious short to me. NZD also looks attractive in most pairs as well as the idea of raising rates is rare right now, especially among major currencies like USD, CAD, and EUR.
AUDNZD on the 4H chart tests resistance around its falling trend line. Further resistance is around 1.05083 should price break upward. The lows could be tested on this news around 1.04163 where there is a long term bottom on the 1D chart.
NZDUSD looks increasingly bullish after breaking above the channel trend line on the 4H timeframe. Resistance around .70857 where price made a triple top which would be a tough level to break above. If it were to break, we could see continued upside and that level would serve as new support.
NJ on the 4H chart finally gains some momentum after bouncing off a quadruple bottom and running up near resistance at a falling trend line. Price could retrace after this hard run, so long opportunities could be found at 77.313 and 76.876.