Dukascopy Bank Team
Dukascopy Bank SA
NZD/USD 4H Chart: Channel Down
Comment: The pace of Kiwi’s depreciation has recently decelerated, but the bears remain in full control. In the short run, however, we are likely to see a rally. NZD/USD is expected to confirm support trend-line and begin an upward correction within the channel. The rise should not extend beyond the upper edge of the pattern at 0.67. The latter level is also reinforced by the weekly R1 and Aug 21 high. At the same time, if 0.64 is violated, there should be an immediate sell-off down to 0.6350, with the next target at 0.6150 (monthly S3).
The SWFX market participants seem undecided: 48% of open positions are long and 52% are short.
NZD/CAD 1H Chart: Falling Wedge
Comment: There is a high risk of a rally in the hourly chart of NZD/CAD, even though ideally we would want the currency pair for form this pattern at the end of a bearish trend. Nevertheless, the base scenario is a breach of the red trend-line, in which case the initial target is going to be the weekly S1 and Aug 27 high at 0.86. The next objective will be the 200-hour SMA, followed by the Aug 25 high and weekly PP at 0.87. The final target would be so far the highest point in August, namely 0.8833. A dip beneath 0.8520 should lead to a decline down to 0.8442, with a likely follow-up sell-off to 0.8327. Meanwhile, the positioning is skewed in favour of the bulls: they take up 64% of the market.
This overview can be used only for informational purposes. Dukascopy SA is not responsible for any losses arising from any investment based on any recommendation, forecast or other information herein contained.
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