Retail sales data from New Zealand released early this morning came in more negative than expected, but the NZD/USD has climbed momentarily.

 

As of this writing the NZD/USD is trading near short term highs around the 0.62325 ratio.  After starting the day near the 0.61750 mark this morning, the NZD/USD has shown an ability to climb higher. Making the move rather intriguing is the fact the upwards momentum was generated after New Zealand’s retail sales data came in with a worse than expected negative result. Contrarian technical traders may be smiling, while some speculators stand in the corner and wonder what is going on.

The NZD/USD actually remains within the lower part of its long term range. The move higher while noteworthy this morning, has been only slight in the overall scheme of its trading range. Price action in the NZD/USD is certain to remain fluid and the knowledge that Reserve Bank of New Zealand Governor Adrian Orr is speaking tomorrow at the Jackson Hole central bankers conference in the U.S should alert speculators to the potential of more fireworks.

The NZD/USD is within sight of Important Resistance, but Key Support is Actually Close Too

Whipsaw trading results in the NZD/USD have been demonstrated the past month, but a broader look at the currency pair highlights a downwards trend.  Technical traders who have been trying to buy near perceived support levels, while looking for a strong reversal higher may have found results difficult. Traders who are looking for price action upwards should keep their targets realistic and not try to capture values that could prove overly ambitious.

• Resistance near the 0.62400 level should be monitored; if this level is penetrated another leg upwards could develop momentarily for the NZD/USD.
• Speculators need to be braced for volatility with important U.S GDP data coming later today and central bank policy speeches on the schedule for tomorrow.

Choppy Results Cry Out for Solid Risk Management in the NZD/USD

While short term traders may be embracing the NZD/USD upside move created this morning, they should monitor technical resistance areas carefully. Economic data and central bank policy from the U.S Federal Reserve will continue to play a key component fundamentally into behavioral sentiment and the trading reactions within financial institutions.

The long term incremental move lower in the NZD/USD remains intact and higher moves may prove to be opportunities to try and sell the currency pair for speculative wagers. Conditions the next two days of trading will remain volatile and risk management is urged. If support near the 0.62100 is approached this could be an additional bearish signal.

NZD/USD Short Term Outlook:

Current Resistance: 0.62400

Current Support: 0.62140

High Target: 0.63180

Low Target: 0.61610

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The USD/BRL has displayed ability to move slightly upwards the past day of trading, but technically the forex pair remains within sight of near term support.

Speculators who want to wager on the USD/BRL via trading today will have plenty of technical considerations to make. The USD/BRL has proven its long term ability to open the day’s trading with vivid gaps, so speculators should monitor the start of the day. Yesterday’s closing price for the USD/BRL currency pair was near 5.1450, which essentially places price action near the upper realms of its five day chart.

However, even as the USD/BRL has accomplished a slight bullish run and been able to sustain the ‘highs’, the forex pair actually has shown ability to incrementally trade lower in the past month. The notion that the financial world is now within the dog days of summer in the northern hemisphere should be taken into consideration, because trends sometimes can prove to be illusions this time of year – meaning they are short lived. Yet, the USD/BRL has mirrored many other major currencies the past handful of weeks and shown some bearish tendencies.

Recent Move Higher may have some Staying Power, but it could also prove to be False

On the 3^rd of August the USD/BRL was trading near the 5.31000 ratio. On the 21^st of July the USD/BRL was near the 5.5200 mark. This decline in price for the USD/BRL currency pair has created a rather incremental pattern. Yes, reversals have been seen, but resistance levels have lowered for nearly a month.

• Resistance near the 5.1600 level should be watched near term, if this level proves strong and is not penetrated higher, additional selling of the USD/BRL could be sparked.
• Today’s opening should be watched closely, a move higher may make sellers nervous, but if price action is consolidated or a move lower occurs early this could be polite bearish signal.

Reversals are certain to occur in the USD/BRL as the Trading Range is Tested Short Term

The USD/BRL is likely to present traders with a solid speculative opportunity today.  With near term resistance levels within sight near the 5.1600 to 5.1700 marks, traders will want to see if these ratios can prove durable. If the higher levels prove strong additional selling may occur on the notion the trend for the USD/BRL remains bearish.

A move above the higher relatively close resistance levels could set off volatility in the near term. However, the last time the USD/BRL traded above the 5.2000 level was on the 5^th of August. If the USD/BRL opens with a slightly lower move, but remains above the 5.1400 mark this could entice bearish traders to aim for the 5.1350 to 5.1275 prices. Entry orders should be used with the USD/BRL and solid risk management is essential.

Brazilian Real Short-Term Outlook

Current Resistance:  5.1496

Current Support:  5.1342

High Target: 5.1639

Low Target:  5.1148

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The USD/SGD has held onto the upwards movement it created before going into the weekend as Monday has started and may entice traders.

The USD/SGD is hovering near the 1.38000 level as of this writing. Before going into the weekend, the USD/SGD currency pair had been seeing plenty of price activity near the 1.37500 ratio, which was until U.S economic data via Average Hourly Earnings came in stronger than expected.

While technical traders may dismiss the price action as a natural move higher as support was proven durable, fundamental traders certainly will point to behavioral sentiment across Forex which shows the USD got strong in most major currency pairs at nearly the exact moment. The move higher attained on Friday was a spike upwards which touched the 1.38340 level briefly.  It appears the USD/SGD currency pair may face rather choppy conditions moving forward this week.

Ride Upwards Mirrors Other Major Currencies as USD/SGD Climbs

The fact that the USD/SGD has essentially held its ground this morning and not reversed sharply lower, likely demonstrates nervous sentiment again is vast regarding the U.S Federal Reserve’s outlook regarding interest rates. On the 26^th of July the USD/SGD was trading near the 1.39000 ratio, this before slumping to a low of nearly 1.374700 momentarily this past Friday. The incremental selling of the USD/SGD likely took place the past tend days because financial houses were counting on a less hawkish U.S central bank.

Friday’s data from the U.S turned Forex on its head quickly and the USD/SGD reversal higher suddenly brought the currency pair in sight of upwards realms.  Yes, the USD/SGD could certainly reverse lower and traders should expect choppy conditions ahead this week as financial houses search for equilibrium, but behavioral sentiment may remain nervous about more interest hikes from the U.S than were expected only one week ago. If this proves to be the case the USD/SGD may continue to test the 1.38000 ratio and higher.

• Support near the 1.38000 should be watched closely for the USD/SGD currency pair in the short term. Durable support could spur on more buying of the USD/SGD as speculative perspectives look for more upside.
• Support near the 1.37500 if broken lower would be noteworthy, but may point to an oversold USD/SGD, which could create reversals higher near term.

USD/SGD Testing Higher Realms Again and Bulls may pursue Price Action

The USD/SGD will generate fast trading today.  Last Friday’s spike higher will certainly be tested by speculators who believe the Forex pair has been overbought, but strong lower moves are likely to create buying opportunities. The USD/SGD may find durable support within the 1.37900 to 1.37650 sphere. Traders must be careful with the amount of leverage they use, and take profit and stop loss orders are urged.

Singapore Dollar Short-Term Outlook

Current Resistance: 1.38150

Current Support: 1.37850

High Target: 1.39090

Low Target: 1.37500

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The USD/JPY has reversed upwards after hitting depths early this week that had not been seen since the first week of June.

As of this writing the USD/JPY is traversing close to the 134.200 mark in rather quick trading. After hitting a low of nearly 130.400 on early Monday morning – a value last seen on the 6^th of June, the USD/JPY currency pair has risen in value. Traders who thought the perceived ‘overbought’ days of the USD/JPY were coming to an end, and wagered on a one way direction downwards should pause to reconsider their strategy.

Technical Charts are Important, but Central Bank policies Matter and Uncertainty Remains

The ability of the USD/JPY to rapidly gain the past couple of days and the knowledge it is approaching important resistance levels again should cause contemplation for speculators who were convinced strong reversals higher would cease.  Yes, on the 27^th of July the USD/JPY was trading near the 137.480 realm before financial houses reacted to the interest rate hike from the U.S Federal Reserve. The selloff which followed was strong, but perhaps it was too strong.

• The upwards trajectory displayed the past few days of trading shows nervous sentiment remains sizeable regarding the USD/JPY, as a lack of clarity about U.S central bank policy stays murky.
• Tomorrow’s Average Hourly Earnings data from the U.S should be monitored and may have an effect on USD/JPY trading conditions.

If the USD/JPY can maintain its current values near the 134.000 level, this consolidation may be a sign financial houses are awaiting more insight from U.S data on the schedule tomorrow. Yes, the Non-Farm Employment Change numbers are due Friday, but it is the earnings data which should be watched closely.

If the hourly pay statistics comes in stronger than expected, the U.S Fed will have little choice but to remain hawkish regarding its interest rate policy. U.S Manufacturing and Services PMI data has been stronger than expected already this week.

Traders should not Expect Consolidation to Remain and Volatility is Likely

The USD/JPY could find a retest of the 133.750 to 133.250 values easily with reversals lower.  However, while U.S data stands in the shadows which could signal ‘the need’ for additional actions from the U.S Federal Reserve, financial houses may not be large sellers. The opportunity to look for slight reversals lower and place a buying position by day traders may prove enticing for short term wagers looking for upside. The near term is likely to provide additional fireworks for USD/JPY traders and further moves higher may be demonstrated.

USD/JPY Short-Term Outlook

Current Resistance: 134.350

Current Support: 133.690

High Target: 134.970

Low Target: 131.120

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After trading near highs early this week not seen since the third week of June, the NZD/USD currency pair has started to look technically bearish again.

The NZD/USD is mirroring results seen in many Forex spheres the past two days of trading; suddenly the USD has gotten stronger again.  As of this writing the NZD/USD is trading near 0.62900, which is actually close to interesting resistance up above.

If the 0.63000 mark gets challenged and sustains value above, this could be taken as a sign by some technical traders that additional buying action may ensue. However, traders may want to remain realistic regarding their upwards targets and keep their ambitions rooted with solid risk management, including take profits that cash out winnings before the potential of downturns following.

USD/NZD may have additional territory to Explore Downwards in the Near Term

On the 2^nd of August the NZD/USD was trading fractionally higher compared to today, and the 0.63000 level started to become resistance technically.  Prior to this on Monday the 1^st of August the NZD/USD was traversing near the 0.63540 ratio before losing ground, the last time those highs were seen was on the 21^st of June. However, before traders become convinced the long term bearish trend of the NZD/USD is about to vanish completely, they should understand the global economic climate remains challenging. The sudden downturn of the NZD/USD may prove durable in the near term.

The Move Higher in the NZD/USD has lost Power and Resistance is beginning to Flourish

If the value of the NZD/USD remains under the 0.63000 level for a sustained amount of time today and head’s into tomorrow with tests of support levels, this could spur on further downside momentum. Traders hoping for reversals upwards should be willing to look for quick hitting positions.

From a risk reward scenario near term in the NZD/USD, there appears to be reasons to suspect nervous sentiment is again building, and a risk of more selling pressure could emerge. Traders may become nervous as ‘chirping’ from U.S Federal Reserve officials have been quick to point out this week they believe more interest rate hikes are needed, not only one more in September.

Technically if the 0.62790 mark begins to falter, additional selling may build which could create a quick test of yesterday’s ratios near the 0.62600 to 0.62500 to be exhibited. Traders should expect some volatility for the NZD/USD the next two days of trading as financial houses continue to search for equilibrium in rather unclear Forex conditions fundamentally, which are bound to cause choppy conditions.

NZD/USD Short Term Outlook

Current Resistance: 0.62998

Current Support: 0.62790

High Target: 0.63185

Low Target: 0.61940

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After reversing from its highs achieved last week, the USD/CAD has found what appears to be durable short-term support and moved upwards this morning.

The USD/CAD is trading near the 1.30045 vicinity of this writing.  After falling through the 1.30000 mark on the 8^th of July, in early trading this Monday the USD/CAD currency pair has been able to muster upwards bullish behavior and is again threatening key resistance levels which if toppled could spark additional speculative action to the upside.

Bullish Behavior in USD/CAD has started to Build Again via Technical Action

The USD/CAD continues to traverse within a range that is challenging long term highs which have not seen a serious test of values above the 1.31000 mark since November 2020. Fundamentally the price of energy products remains high, but oil has seen some of its higher values erode over the past few weeks incrementally and other commodity prices have begun to stumble as well. This is not written as a prediction that crude oil prices are going to remain stable and even move lower, merely an observation of market action and the potential that inflation threats are starting to de-escalate.

• The USD/CAD 1.30000 mark remains a critical psychological mark for traders.
• If the USD/CAD breaks above and sustains the 1.30100 level it could be a bullish signal.

The USD/CAD was able to touch a high of nearly 1.30880 on the 5^th of July.  On the 6^th of July the price of the USD/CAD currency pair once again moved towards this mark, but the price reversed lower and on the 8^th of July the Forex pair touch nearly 1.29355. In early trading today after testing these depths again, the USD/CAD has begun to climb and its ability to topple the 1.30000 with relative ease is noteworthy.

A Slight Move Higher Could Signal Bullish Behavior has Room to Roam in USD/CAD

The USD/CAD remains within the upper tiers of its value technically and while the run higher on the 5^th of July did run out of power, it remains an interesting target for traders with a bullish perspective.  If the USD/CAD is able to break above the 1.30100 resistance level which is relatively nearby this could be a signal that buying firepower could cause technical traders to believe speculative positions aiming for the 1.30150 to 1.30200 could be intriguing wagers, particularly considering the USD/CAD traded near 1.30300 at the end of last week.

Bullish speculators should practice their risk management wisely. The USD/CAD like all other Forex pairs is proving volatile within the current trading landscaped due to complications the U.S Federal Reserve is causing via its interest rate policy and its unclear outlook as U.S economic conditions seemingly offer conflicting data on a daily basis.

Canadian Dollar Short-Term Outlook

Current Resistance: 1.30125

Current Support: 1.29850

High Target: 1.30525

Low Target: 1.29100

The USD/BRL will begin trading today near mid-term highs and speculators may feel enticed to wager on direction, but they should be careful.

When the USD/BRL begins to trade today it may experience a spike which is often the case with the currency pair.  Upon the return of U.S financial institutions today from their long holiday weekend, fuller trading volumes will certainly be experienced, and this could alter the behavioral sentiment which has been seen in the USD/BRL the last two trading days momentarily.  

The USD/BRL has been consistently moving higher since late May. The heights reached by the USD/BRL the past two days of trading are testing values not seen since early February of this year. It should be noted on the 4^th of February the USD/BRL tested the 5.35000 juncture briefly.

The USD/BRL provides speculators with rather consistent trends, but they often prove to be volatile particularly when the Forex market is opening for trading. Spikes up and down are commonplace, and traders who are brave enough to hold positions of the USD/BRL overnight must be prepared for rather swift moves during the early hours of trading days.

Today’s conditions are likely going to prove rather volatile as increased transactions are delivered into the USD/BRL. The past two days of trading have seen new highs and the question is if there will be a slight selling correction this morning, or if the incremental steps higher will continue to flourish.

If the USD/BRL breaks above the 5.33000 level with relative ease this morning and sustains prices above in the ensuing hours it could point to additional higher values to come.  Traders who can use take profit ratios near resistance levels they perceive as durable may want to cash out of winning positions if they materialize.

The potential for a slight countermove lower early this morning, or later during the day when the USD/BRL is experiencing full volume should be anticipated. Traders who want to look for lower moves from the current heights of the USD/BRL should keep their targets realistic and not become overly ambitious. Support levels near the 5.31750 mark should be watched, choppy conditions were seen yesterday and a low of about 5.28690 was seen briefly.

Traders need to be prepared for rather fast trading in the early hours of the USD/BRL today. However, after the dusts settles and volatility eases, speculators may believe that wagers on incremental upside potential based on the mid-term bullish trend with quick hitting take profit orders may be worthwhile.

Brazilian Real Short-Term Outlook

Current Resistance:  5.3311

Current Support:  5.3147

High Target: 5.3399

Low Target:  5.2955

ADA/USD has stumbled again and is within sight of important lower depths, as nervous sentiment in the broad cryptocurrency market remains evident.

ADA/USD is trading near the 48 and half cent ratio as of this writing. On the 26^th of June Cardano was able to touch the 52 and half cent level, but selling has certainly erupted again the past couple of days which has brought ADA/USD back to important lower values. Cardano remains a volatile cryptocurrency due to quick moves. In early trading this morning ADA/USD traded briefly near the 0.47220000 level.

The 42 cents to 56 cents price range has proven rather interesting since the middle of June.  ADA/USD remains within a long term bearish trend and its incremental loss of value is clear on technical charts. In the first week of September 2021, ADA/USD was trading above the 3.00000000 level. Those sunnier days now feel long gone, and traders who have been waiting for a sudden burst of strong upwards buying gaining sustained strength have been sorely disappointed.

The inability of ADA/USD to achieve sustained moves higher will keep bearish traders attention on support levels which lurk.  If ADA/USD can keep its head above the 48 cents level this may actually attract short term bullish buyers who want to aim for 49 cents and slightly above, but they should probably only look for very fast trades and use take profit orders to cash in. Because if the 48 and a quarter cent ratio were to suddenly come into focus, sellers could not be blamed for targeting values below again.

The broad cryptocurrency market continues to show signs of nervousness.  Yesterday’s trading began to produce incremental selling and the price action of ADA/USD has mirrored the results of the larger market. Cardano remains an important cryptocurrency with a market capitalization ranking at number 8. If ADA/USD technically falls below the 48 cents level this could be viewed as an indicator that additional nervous selling will build.

Lows in ADA/USD have continued to test marks within the 47 cents price range the past week of trading when downturns have occurred. Speculative sellers who believe another round of downwards momentum is going to develop may want to ignite shorts when ADA/USD has touched technical resistance areas perhaps around 0.48610000 if they are conservative. Traders should use entry price orders when trading ADA/USD because it moves fast. Speculators are also encouraged to use take profit and stop loss orders as risk taking tools within the current market conditions.

Cardano Short-Term Outlook

Current Resistance: 0.48860000

Current Support: 0.47990000

High Target: 0.49370000

Low Target: 0.45490000

The pair will likely keep falling as bears target the key support level at 0.6850, which was the lowest level on June 15th.

Bearish View

• Sell the AUD/USD pair and a take-profit at 0.6850.
• Add a stop-loss at 0.7025.
• Timeline: 1-2 days.

Bullish View

• Set a buy-stop at 0.700 and add a take-profit at 0.7050.
• Add a stop-loss at 0.6870.

The AUD/USD price retreated as the dollar strength continued as worries about a global recession continued. The pair dropped to a low of 0.6935, which is about 4.5% below the highest point this month.

Global Recession Worries

The AUD/USD pair has been in a strong bearish trend as investors continued worrying about the rising risk of a recession.

Global central banks like the Federal Reserve and the Reserve Bank of Australia (RBA) decided to ratchet up their rate hikes. Earlier this month, the RBA decided to deliver its interest rate for the second straight meeting. It also signaled that it will keep hiking rates in the coming meetings.

And last week, the Fed made headlines after it decided to deliver its biggest rate in almost three decades. It hiked rates by 0.75% and the Fed chair signaled that it will continue hike interest rates by either 0.75% or 0.50% in the coming meetings.

Therefore, the US dollar has continued strengthening as investors wait for a recession as rates surge. Historically, a combination of high interest rates, low unemployment rate, and high inflation usually leads to a recession.

Leading economic numbers have signaled that the American economy is weakening. The most important one is on housing. Data published last week showed that the country’s building permits and housing starts declined sharply in May.

A few weeks ago, additional data showed that the US retail spending, pending, and new home sales have been weakening. Therefore, there are signs that the weakness will continue as the Fed hikes rates.

The AUD/USD pair is also sliding as commodities retreat. The Bloomberg Commodity Index has dropped from $135 early this month to $127.7. The pair will likely be more muted since US markets will be closed for Juneteeth holiday.

AUD/USD Forecast

The four-hour chart shows that the AUD/USD pair has been in a strong bearish trend in the past few days. The pair has moved below the first resistance line of Andrews Pitchfork. It has also dropped below the 50-day moving average while the Relative Strength Index has moved below the middle line.

The pair has moved below the important support levels at 0.700 and 0.7057. Therefore, the pair will likely keep falling as bears target the key support level at 0.6850, which was the lowest level on June 15th.

Bearish View

• Sell the BTC/USD pair and set a take-profit at 20,000.
• Add a stop-loss at 24,000.
• Timeline: 1 day.

Bullish View

• Set a buy-stop at 23,500 and a take-profit at 25,000.
• Add a stop-loss at 20,000.

The BTC/USD pair remained under pressure as investors waited for the upcoming interest rate decision by the Federal Reserve. It is trading at 21,500, which is higher than the intra-week low of 20,896. It remains sharply below its all-time high of near $70,000.

Cryptocurrencies Pressured

Bitcoin and other cryptocurrencies have been under intense pressure this week as investors continue reflecting on last Friday’s consumer inflation data.

The numbers showed that the country’s consumer price index (CPI) surged to a 41-year high of 8.6%. Beneath the headline number, data showed that other parts of the economy continued experiencing a higher inflation rate.

For example, gasoline prices have more than doubled in the past 12 months. The prices of other food items like eggs and meat have also risen by over 30%.

Therefore, the role of Bitcoin – and gold – as inflation hedges has been invalidated as their prices have continued falling.

The next key catalyst for the pair will be the upcoming interest rate decision by the Federal Reserve. With inflation surging, analysts believe that the FOMC will hike interest rates by a whopping 0.75%. If his happens, it will be the biggest increase since the Volker era.

The BTC/USD pair is also struggling as companies in the industry struggle. Celsius, a leading crypto lender paused withdrawals and swaps. Similarly, companies like Coinbase, BlockFi, and Crypto.com have all announced that they will cut jobs in the coming weeks.

Most importantly, some of the best-known crypto advocates like Jack Dorsey, Michael Novogratz, and Michael Saylor have all remained silent amid the freefall. There is also rising fear that MicroStrategy could receive a margin call if Bitcoin continues falling.

Still, with Bitcoin nearing its 2017 high, there is a likelihood that it could see a temporary relief in the near term.

BTC/USD Forecast

The four-hour chart shows that the BTC/USD pair has been in a strong bearish trend since November last year. It managed to cross the important support level at $25,361, which was the lowest level on May 12th.

The pair remains below all moving averages and it is forming a bearish flag pattern. Therefore, the likely scenario is where it makes a strong bearish breakout as investors target the support at 20,000.