AUDUSD: Dead Cat Bounce targets 0.925 (Below 0.93)

ASIA ROUNDUP:

• NZD saw the most action following RBNZ decision to increase rates by 25bps to 3%. NZDJPY jump 0.4%. The markets had already priced in the rate hike but the following statement was also hawkish, with the consensus being a further 0.5% increase this year, with some speculating June as the next rate rise.

• A$ sheepishly held onto yesterday's lows with mild gains of 0.1% early Asia trading as the markets await the next catalyst.

UP NEXT:

• German IFO Business climate survey edged lower from its 3-year high last month but overall looks strong, although this month's forecast is 0.2 lower than last month at 110.50. Whilst we can expect some movement on EUR crosses it is likely to be overshadowed by...

• ECB President, Mario Draghi, speaking about 'Central Banking in the Next Two Decades'. A lot of attention will be paid to his words for any clues regarding possible QE from the exchange rate and deflation.

• US Core Durable goods is a volatile release (in term of the actual release itself) as it can swing wildly between positive and negative. Durable goods are those built to last over 3 years so are a good indicator for economic outlook.

• US Unemployment claims come out at the same time so expect some volatility across the markets, particularly USDCAD and USDJPY as they are main trading partners with the US.

Pairs to Monitor: EURUSD, USDCAD, USDJPY, AUDUSD,

TECHNICAL ANALYSIS:

AUDUSD: Dead Cat Bounce targets 0.925 (Below 0.93)

Dead Cat bounce has to be my favourite setup, not only because the name is slightly comical but also because it is easy to identify and relatively reliable.

Indeed here we have a solid bearish bar followed by 'sheepish' retracement price action floating towards a resistance zone. Regardless of the outcome as a price action set-up I find it very appealing for a short position.

Options to enter are live at market with stop above the resistance area (up to you where). Alternatively you can set up a sell-limit order closer to the pivot line to anticipate 'one last gasp' before the losses resume.

​A break above 0.9308 invalidates the analysis.

BRENT: Tweezer Bottom above Monthly Pivot

5 trading sessions ago we saw a Shooting Star Reversal followed by a Spinning Top/Rikshaw Man Doji, followed by 3 Hanging Men Reversals.

Just because the name states (or implies) 'reversal' or it doesn't mean it has to be one. It could just be a temporary weakness to a movement and sideways trading. As long as we remain above the Monthly Pivot then I suspect we are nearing the end of a correction and the 'Hanging Man Reversal' will turn out to be bullish hammers.

Also notice that the past 2 trading sessions have produced a 'Tweezer Bottom' with yesterday's inside bar showing a reduction of volatility whilst also respecting the Monthly Pivot.

The next target remains $110.80 and bullish setups on lower timeframes (H4, H1, and H15) could be considered above $105.80 with a break below $108.30 confirming the analysis invalidated.