NZDJPY: Hanging Man Reversal makes the 'topping pattern' a more likely scenario

No real trends established across FX today, however NZD pairs saw the most direction to return near yesterday’s lows. NZDJPY appears to retain the bearish sentiment from yesterday’s session and we suspect a topping pattern is in place on D1.

• AUD home loans remains steady at 0%, which is above the -0.6% contraction expected.

• AUS200 rebounded from the lows to trade at 3-day highs. The question is whethere this positive sentiment will carry over to European Equities.

• No real trends established across FX today, howeer NZD pairs saw the most direction to return near yesterday;s lows. NZDJPY appears to retailn the bearish sentiment from yeterday;s session and we suspect a topping pattern is in place on D1.

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Not the most exciting news today, but USDCAD could see a breakout of the current range if we see a surprise number. A more likely driving them is going to come from Europe and the Portuguese bank, and whether investors see this as an ongoing problem. If so, then safe havens such as JPY, CHF and Gold are more likely to benefit from inflows.

• GER CPI is the final reading, so not likely to deviate much away from consensus (if at all). However as always, if we do get a surprise revision then it may shake things up a little. EURUSD is a neutral bias today as it is trading within range so lower timeframe trading would be preferable and not to outstay your welcome going into the weekend.

• CAD employment is expected to be at a slightly slower rate this month of +20k jobs created and unemployment is expected to remain steady at 0.7%. Last month we saw unemployment rise from 0.6% so any reduction in unemployment could see USDCAD trade lower.

• US Federal budget is the only [anticipated] news tonight, but not likely to be a huge driver for FX.

TECHNICAL ANALYSIS:

NZDJPY: Hanging Man Reversal makes the 'topping pattern' a more likely scenario

Please view yesterday's post for a more in-depth analysis: NZDJPY Grinding Higher - extra topping anyone?

The only thing to add to this commentary is that yesterday's volatile Hanging Man reversal (and bearish close) make a stronger argument for a bearish wedge to be in the making.

​The options available are to either trade on the short side on intraday timeframes towards key levels, or play the longer-term game of trying to pick the top on D1. However going into the weekend you need to decide for yourself if you are comfortable holding a position over the weekend. If not, then keep this in your watch list for Monday and take the weekend off.