New Zealand Dollar: NZD/USD (NZD=X) buyers will return and the uptrend will resume soon
Risk currencies had a great time in October. The risk sentiment improved in financial markets after the US-China partial trade deal and the Brexit deal, although the latter didn’t pass the British Parliament. As a result, NZD/USD turned bullish and it climbed more than 250 pips, which took place in waves, as trends usually do.
Last week, the bullish trend resumed again after retracing lower in the previous week. The FED cut interest rates for the third time in a row and despite being over with rate cuts for now, they let markets know that the next move would likely be another cut rather than a rate hike, as things are right now.
Although,we are seeing this pair retrace lower today. The price has retraced around 40 pips lower now and the pullback seems complete on the H1 chart. The stochastic indicator is oversold on this chart and the 50 SMA (yellow) is providing support. Besides that, the previous H1 candlestick closed as a doji, which is a reversing signal. So, we decided to open a buy signal right here, hoping that buyers will return and the uptrend will resume soon.
Overall, the bias in prices is: Sideways.
The projected upper bound is: 0.65.
The projected lower bound is: 0.63.
The projected closing price is: 0.64.
A big black candle occurred. This is bearish, as prices closed significantly lower than they opened. If the candle appears when prices are “high,” it may be the first sign of a top. If it occurs when prices are confronting an overhead resistance area (e.g., a moving average, trendline, or price resistance level), the long black candle adds credibility to the resistance. Similarly, if the candle appears as prices break below a support area, the long black candle confirms the failure of the support area.
During the past 10 bars, there have been 5 white candles and 5 black candles. During the past 50 bars, there have been 25 white candles and 25 black candles.
An engulfing bearish line occurred (where a black candle’s real body completely contains the previous white candle’s real body). The engulfing bearish pattern is bearish during an uptrend (which appears to be the case with FOREX NZD=). It then signifies that the momentum may be shifting from the bulls to the bears.
If the engulfing bearish pattern occurs during a downtrend, it may be a last engulfing bottom which indicates a bullish reversal. The test to see if this is the case is if the next candle closes above the bottom the current (black) candle’s real body.
Momentum is a general term used to describe the speed at which prices move over a given time period. Generally, changes in momentum tend to lead to changes in prices. This expert shows the current values of four popular momentum indicators.
One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 65.4597. This is not an overbought or oversold reading. The last signal was a buy 3 period(s) ago.
Relative Strength Index (RSI)
The RSI shows overbought (above 70) and oversold (below 30) areas. The current value of the RSI is 55.16. This is not a topping or bottoming area. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a buy 30 period(s) ago.
Commodity Channel Index (CCI)
The CCI shows overbought (above 100) and oversold (below -100) areas. The current value of the CCI is 79. This is not a topping or bottoming area. The last signal was a sell 0 period(s) ago.
The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a buy 22 period(s) ago.
Rex Takasugi – TD Profile
FOREX NZD= closed down -0.003 at 0.639. Volume was 12% below average (neutral) and Bollinger Bands were 19% narrower than normal.
Open High Low Close Volume___
0.644 0.646 0.639 0.639 28,733
Short Term: Overbought
Intermediate Term: Bullish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 0.64 0.63 0.66
Volatility: 7 8 9
Volume: 29,777 31,225 36,820
Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.
FOREX NZD= is currently 3.0% below its 200-period moving average and is in an upward trend. Volatility is relatively normal as compared to the average volatility over the last 10 periods. Our volume indicators reflect volume flowing into and out of NZD= at a relatively equal pace (neutral). Our trend forecasting oscillators are currently bullish on NZD= and have had this outlook for the last 16 periods.