The Weekly Update: Technical Attention on NZD

EURUSD Update

As noted in the prior weekly update we refrained from initiating short EUR positions until we have a clear indication for EUR corrective weakness. Towards the end of last week we noted EUR crosses are providing early indications for some selling, which is why we initiated a short EURAUD trade.

There may be a weekly entry to short EURUSD, however, we will require a higher price in order to consider such a trade. We will cautiously write the heavier selling may only begin next week or following the US CPI on Friday. The recent selling that took place in EURUSD last Friday were triggered by the NFP, which gains momentum as stops were triggered.

The US CPI is one of the key economic figures this week. We may only begin affirming USD trend as we near the end of the week, it is too early to consider any USD trades in the market at the time of this writing. To recap, the Fed tied the next rate hike to the inflation figures. Should the US CPI miss the market expectations we may note heavy USD selling and vice versa.

We should highlight that last month’s reaction to the US CPI is unlikely to repeat itself and the reaction may be limited unless the US CPI contracts (below 0.0%).

We have several potential entries in the market we would like to present, we are unlikely to opt for all entries.

GBPUSD Weekly Chart

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The Weekly Update: Technical Attention on NZD

GBPUSD Weekly Chart 06/08/17

GBPUSD Strategy

As noted in our recent GBPUSD trading strategy we closed out long position as we noted GBP may post some corrective weakness. From a technical angle the dip may be sufficient to re-enter GBPUSD. The potential drawdown is approximately +100 pips, it is quite likely some drawdown may be incurred at the time of this writing.

We have a choice whether to wait for a lower price, however, should the gains begin and we are not in the market it may be a struggle to join the anticipated uptrend. We must also bear in mind the US CPI may impact all USD pairs and crosses including GBPUSD.

NZDUSD Weekly Chart

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The Weekly Update: Technical Attention on NZD

NZDUSD Weekly Chart 06/08/17

NZDUSD Strategy

We have been monitoring AUDUSD and NZDUSD since the breakout was affirmed on the weekly charts. We were expecting a deeper retracement in AUDUSD, which failed to materialize at the time of this writing. NZDUSD retracement however may be sufficient to initiate a long trade.

There are 2 key support levels in NZDUSD weekly chart, 0.7390 and 0.7214. It is difficult to determine which of these price levels may contain any weakness in the currency pair. We cannot layer the protective stop beneath 07214 as it dents the RR. Should we opt for the trade we may exercise a tighter stop with the intention of re-entering at a lower price.

NZ inflation expectations are due to be released during the Asian session, which may trigger some volatility in NZD pairs and crosses. A rise inflation may trigger NZD strength as it may pressure the RBNZ to re-evaluate its monetary policy.

Should the inflation expectations disappoint the market reaction may be sufficient to trigger the protective stop in NZDUSD should we opt for the trade.

NZDUSD Trade Alert

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The Weekly Update: Technical Attention on NZD

NZDUSD Weekly Chart II 06/08/17

NZDUSD long at market price (0.7400)
Take profit: 0.7700
Protective stop: 0.7305
Risk Ratio (RR): 1 : 3 (approx.)
Estimated duration: 16 days (approx.)

Price range: Relevant as long as price is below 0.7435

Note: NZ inflation expectations may provide the initial trigger, we may re-enter the trade if the stop is triggered as outlined in the strategy.

GBPUSD Trade Alert

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The Weekly Update: Technical Attention on NZD

GBPUSD Weekly Chart 07/08/17

GBPUSD long at market price (1.3025)
Take profit: 1.3400
Protective stop: 1.2875
Risk Ratio (RR): 1 : 2.7 (approx.)
Estimated duration: 21 days (approx.)

Price range: Relevant as long as price is below 1.3060

Note: The potential drawdown is a re-test of 1.2920.

09/08/17 UPDATE: The recent gains in NZDUSD are on the verge of being sufficient, however, 5 minutes prior to the daily close the volatility will increase.

If we roll the trade into the RBNZ monetary policy there will be gap after the daily close, anywhere between 40 – 100 pips. There may be an hourly entry to long NZDUSD but it requires an hourly close.

For the time being we are closing 20% of the long trade at market price (0.7336), we will issue another update in approximately 15 minutes.

09/08/17 UPDATE II: We decided to close NZDUSD at market price (0.7333) and incur the loss.

The hourly chart may show some gains but the 4hr chart suggests the downtrend is still in place even if the price corrects higher unless it manages to hold above 0.7390.

The choice we have is either to double the size of the stop or exit the long trade. It is a tough decision but as we noted above we are exiting the trade.

10/08/17 UPDATE: GBPUSD protective stop was shifted to 1.2840.

USDCHF Trade Alert

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The Weekly Update: Technical Attention on NZD

USDCHF Daily Chart 13/08/17

USDCHF long at market price (0.9629)
Take profit: 0.9855
Protective stop: 0.9558
Risk Ratio (RR): 1 : 2.7 (approx.)
Estimated duration: 10 days (approx.)

Price range: Relevant as long as price is below 0.9660

Note: The potential drawdown is a re-test of 0.9690. We used the ask price for the long trade due to the spread, which may still be wide for some traders.

14/08/17 UPDATE: USDCHF is trading at 0.9685 at the time of this writing, we are are closing 20% of the long trade at market price.

14/08/17 UPDATE II: The recent gains that took place in USDCHF were as a result of the geopolitical tension easing as we anticipated. However, the gains that took place are too strong and may only encourage a bearish retracement. We cannot shift the stop above the entry until Tuesday’s close.

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The Weekly Update: Technical Attention on NZD

USDCHF Daily Chart 14/08/17

As a result we decided to close USDCHF long trade at market price (0.9705), we may re-enter if a retracement takes place later this week. We could have waited for the daily close but we find current levels to be appropriate.

14/08/17 UPDATE III: 1.2845 appears to be holding in GBPUSD, we may also have a 4ht entry in the pair at the 4hr close. We can wait a couple of hours but we are too close to the market and we would rather take the following step prior to the 4hr close.

We are shifting GBPUSD protective stop to 1.2829, we would like to see if the potential 4hr entry will evolve into a firmer retracement. This is a rare action as we often prefer accepting the loss rather than drifting in a drawdown.

EURJPY Trade Alert

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The Weekly Update: Technical Attention on NZD

EURJPY 60min Chart 14/08/17

EURJPY long at market price (129.15)
Take profit: 130.65
Protective stop: 128.74
Risk Ratio (RR): 1 : 3.6 (approx.)
Estimated duration: 3 days (approx.)

Price range: Relevant as long as the price is below 129.35.

Note: We are taking a risk by attempting to join the uptrend at a higher price. Should EURJPY break below 128.90 it may struggle to correct higher.

15/08/17 UPDATE: EURJPY is trading at 129.70 at the time of this writing.

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The Weekly Update: Technical Attention on NZD

EURJPY 60min Chart 15/08/17

We are closing 30% of the long trade at market price and shift the protective stop to the entry (stop was later shifted to 129.30).

15/08/17 UPDATE: 1.2845 appears to be holding in GBPUSD, we may also have a 4ht entry in the pair at the 4hr close. We can wait a couple of hours but we are too close to the market and we would rather take the following step prior to the 4hr close.

We are shifting GBPUSD protective stop to 1.2829, we would like to see if the potential 4hr entry will evolve into a firmer retracement. This is a rare action as we often prefer accepting the loss rather than drifting in a drawdown.

GBPCAD Trade Alert

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The Weekly Update: Technical Attention on NZD

GBPCAD Daily Chart 15/08/17

GBPCAD long at market price (1.6419)
Take profit: 1.6700
Protective stop: 1.6290
Risk Ratio (RR): 1 : 2.2 (approx.)
Estimated duration: 8 days (approx.)

Note: Although we are anticipating a weak CAD the data tomorrow from the UK (average earnings) may impact GBPCAD, which we remind is an extremely volatile cross. This is daily entry.

The potential drawdown is a dip towards 1.6350.

16/08/17 UPDATE: The ECB confirmed Mario Draghi will not deliver a new monetary policy speech at Jackson Hole, which triggered unusual volatility in the market.

EURJPY was forced off its daily high to current levels. While the pair can still meet its objectives we are displeased with the reaction as it mutated the technical structure of the pair.

It is a tough decision but we are closing EURJPY long trade at market price (129.98).

16/08/17 UPDATE: GBPCAD triggered the protective stop, we are not re-entering the market. As opposed to GBPCAD CADCHF is still valid but we are not holding long CHF positions.

22/08/17 UPDATE: GBPUSD triggered the protective stop by a spike, we are not re-entering the market. It was somehow expected as we were displeased with the progress of the trade for some time. We later noted that GBPUSD protective stop was triggered by a spike in the weekly chart before correcting higher.


AS ALL THE SIGNALS IN THIS PAGE ARE CLOSED THE STRATEGIES ARE NOW ACCESSIBLE TO ALL TRADERS



The Weekly Update: Technical Attention on NZD

The Weekly Update: Technical Attention on NZD