Forex Trading Analysis: NZD/USD, USD/JPY, AUD/USD

NZD/USD slides below bullish channel, USD/JPY visits 40-day SMA

(Christina Parthenidou – XM)

NZD/USD slides below bullish channel but remains supported

NZDUSD is in the fourth consecutive day of declines, set to confirm its exit from a short-term bullish channel at 0.6267.

While the momentum indicators suggest that the negative correction has just started, some confirmation is required since the RSI and the MACD have not significantly deviated below their neutral levels; the RSI is still close to its 50 neutral mark and the MACD marginally below its red signal line, reflecting a neutral-to-bearish short-term bias overall.

Moreover, the price itself is currently facing support around the 50-day simple moving average (SMA) and the 38.2% Fibonacci retracement of the 0.6574 – 0.6059 downfall at 0.6256. If that base holds, with the price immediately crawling back above the 50% Fibonacci of 0.6317, the bulls may again attempt to breach the 78.6% Fibonacci of 0.6464 and the channel’s upper boundary seen at 0.6485. Should they claim this zone, all attention will turn to June’s peak of 0.6574. Note that the 200-day SMA is also converging to that number.

In the event the sell-off continues, the focus will initially turn to the 0.6200 – 0.6180 region. Another defeat at this point could aggressively press the pair towards the two-year low of 0.6059, while lower, the price may chart a new lower low at 0.6000.

Summarizing, despite the quick depreciation in NZDUSD, the pair might have another opportunity to improve its fortunes at 0.6256. Otherwise, the bearish wave could gain extra legs.

USD/JPY visits 40-day SMA at 135.55, bullish bias

USDJPY is turning up, hitting the strong immediate resistance at 135.55, which overlaps with the 40-day simple moving average (SMA).

The pair remains inside the Ichimoku cloud, while the RSI is getting closer to the positive territory and the stochastic oscillator is moving up towards the 80 level after the bullish crossover between the %K and %D lines. Both suggest that the next move may be up instead of down in the near-term.

If the price closes decisively above the 135.55 resistance, the bulls could push up to the 24-year high of 139.35 before testing the psychological level of 140.00.

On the other hand, a drop could hit the support level of 131.35, which the market failed to break below since June. Even lower, the market could try to break through the 130.37 barrier again before falling to the 125.10–126.30 support zone.

Overall, USDJPY needs to climb above the 40-day SMA for a short-term bullish move to be confirmed, while a drop below 130.37 could generate a lower low and change the outlook to bearish.

AUD/USD: Is there enough gas in the bears tank to reach the 0.645 level?

(Jing Ren – Orbex)

The current structure of the AUDUSD pair indicates that the market is forming a zigzag a- b-c, which currently includes a complex bearish correction b. Wave b consists of primary sub-waves.

The last section of the chart shows the structure of the final primary wave. It seems that it will be an intermediate triple zigzag (W)-(X)-(Y)-(X)-(Z), which is currently completed in 4/5 parts. To complete this pattern, the final actionary wave (Z) is needed, which seems to take the form of a minor double zigzag W-X-Y and may end near 0.645.

At that level, cycle correction b will be at 61.8% along the Fibonacci lines of cycle impulse wave a.

According to an alternative scenario, the bearish wave of the primary degree, which is part of the cycle correction b, may be fully completed.

Thus, in the last section of the chart, we can observe the formation of the initial part of the cycle wave c, which can take the form of an impulse ①-②-③-④-⑤. The structure of the potential impulse is schematically shown by trend lines.

It is assumed that the primary impulse ① and the correction ② to this impulse have already been built, so in the near future the currency pair may move in an upward direction, forming a primary third wave above the maximum of 0.728 in the direction of the price mark of 0.765.

At the level of 0.765, impulse wave ③ will be at 161.8% of wave ①.

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