New Zealand Dollar: NZD/USD (NZD=X) Prolonged Short-Squeeze Could Drive Kiwi into .6451 Over Near-Term
Optimism over Brexit may be behind the New Zealand Dollar’s early strength on Monday, however, the move is likely being fueled by a short-squeeze that began last week following the release of a report showing a slight improvement in quarterly consumer inflation data.
Earlier on Monday, a report showed Credit Card Spending growth slowed to 4.8% in September from 6% in August. Traders were looking for a 5.1% rise.
A weakening U.S. economy and rising chances of a Fed rate cut at the end of the month could also be forcing investors to trim short-positions. Traders may also be reacting to upbeat comments from the U.S. and China about current trade negotiations.
This short-covering rally may not last much longer with investors pricing in a 25-basis point rate cut by the Reserve Bank of New Zealand (RBNZ) in November.
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 white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 7 white candles and 3 black candles for a net of 4 white candles. During the past 50 bars, there have been 25 white candles and 25 black candles.
Three white candles occurred in the last three days. Although these candles were not big enough to create three white soldiers, the steady upward pattern is bullish.
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 93.2886. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a buy 19 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 61.90. 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 20 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 210.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a sell 5 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 12 period(s) ago.
Rex Takasugi – TD Profile
FOREX NZD= closed up 0.002 at 0.640. Volume was 14% below average (neutral) and Bollinger Bands were 34% narrower than normal.
Open High Low Close Volume___
0.636 0.642 0.636 0.640 28,975
Short Term: Overbought
Intermediate Term: Bullish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 0.63 0.63 0.66
Volatility: 7 8 9
Volume: 32,290 31,994 37,699
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 3.1% 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 6 periods.
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