Matt Simpson, CFTe, MSTA
CityIndex
MARKET SNAPSHOT:
ASIA HANDOVER:
FX:
NZD Trade balance beat expectations to see exports at their highest level in nearly 3 years. However with the NZD being the biggest G10 currency the higher Kiwi Dollar will begin to hurt exporters. AUDNZD at 4-week high USDCNH within a whisker of the 1--month highs and currently trading at 6.207
INDICES:
AUS200 and Nikkei opened lower following the lead from Wall Street. Nikkei sold off by 1.6% with the added weight of being ex-dividend day but recovered losses to trade to a 6-day high
UP NEXT:
CHART OF THE DAY:
EURAUD: Targeting 1.48
Patterns (such as head and shoulders) can take a long time to evolve, and tricky to analyse, let along trade. This is why I prefer to use patterns to provide anticipated direction and price objectives only.
The original analysis was posted on the 25th Feb when I raised the possibility of a Right Shoulder to form, only to see it break to a new high before taking another dip lower.
There are two barriers this has now overcome to turn bearish - 1: Broken trendline and 2: Now trading beneath 1.50
Whilst the overall price objective is down near 1.420 I doubt very much to get there this week! However any retracement towards 1.50 accompanied with bearish setups could provide a decent entry to trade down to 1.48.
A break above 1.50 invalidates the analysis
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