RBNZ Surprise Slams New Zealand Dollar: NZD/USD (NZD=X)
NZDUSD has been slammed following the surprise decision by the RBNZ to cut rates by 50bps (Exp. 25bps). Consequently, the pair broke through key support at 0.6480 before testing the psychological 0.6400 handle.
Momentum indicators as signalled by the DMI are bearishly aligned, however, given the size of the drop we do not rule out some slight relief on profit taking. Gains are likely to be shallow as risks remain tilted to the downside for the pair. As such, a closing break below 0.6400 raises scope for a test of the 0.6340-50 support zone.
Overall, the bias in prices is: Downwards.
The projected upper bound is: 0.66.
The projected lower bound is: 0.64.
The projected closing price is: 0.65.
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 3 white candles and 7 black candles for a net of 4 black candles. During the past 50 bars, there have been 27 white candles and 22 black candles for a net of 5 white candles.
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 33.6755. This is not an overbought or oversold reading. The last signal was a buy 2 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 27.16. This is where it usually bottoms. The RSI usually forms tops and bottoms before the underlying security. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a buy 54 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 -132.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a buy 1 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 sell 9 period(s) ago.
Rex Takasugi – TD Profile
FOREX NZD= closed down -0.006 at 0.646. Volume was 34% above average (neutral) and Bollinger Bands were 70% wider than normal.
Open High Low Close Volume___
0.652 0.656 0.638 0.646 48,478
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 0.66 0.66 0.67
Volatility: 6 9 10
Volume: 37,270 37,085 42,450
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 3.8% below its 200-period moving average and is in an downward 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 bearish on NZD= and have had this outlook for the last 6 periods. Our momentum oscillator is currently indicating that NZD= is currently in an oversold condition.