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/CAD has reversed from early morning lows, and support for the moment appears rather solid and traders have important choices to make.

The USD/CAD remains within the lower realms of its range taking into consideration a one month chart.  However, this morning’s early trading broke highs seen yesterday and Friday. The USD/CAD currency pair is around 1.28700 as of this writing and is challenging values seen on Thursday of last week. When the Bank of Canada increased its interest rate on the 14^th of July the USD/CAD was trading near 1.32200 momentarily, after the hike a low of nearly 1.28300 was seen on the 23^rd.

U.S Interest Rate Hike was Anticipated and the USD/CAD Remains Turbulent

The lows seen on the 23^rd of July were penetrated on the 28^th of July when the U.S Fed hiked their interest rate, and yesterday the USD/CAD hit a monthly low of nearly 1.27675. The last time this value had been seen was on the 10^th of June. The move higher in the USD/CAD since hitting yesterday’s low needs to be looked at by traders and may prove suspicious in some eyes.

• The Bank of Canada has made it clear they intend on being hawkish and the early September monetary meeting is likely to produce another hike higher.
• Matching the U.S Fed’s moves seems to be the intent of the Bank of Canada to protect the Canadian dollar.
• Commodity prices in the energy sector and grains factor into the behavioral sentiment for USD/CAD trading.

Resistance levels should be watched closely in the short term. If the 1.28750 level begins to look durable it may set off another round of selling for the USD/CAD and begin to challenge support levels again. The move higher after yesterday’s low was seen, was likely a reaction to dropping below the 1.28000 level for the first time in a sustained manner since the second week of June.

Risk Management is Necessary as these Lower Realms of the USD/CAD get Tested

Having tested lows not seen in a month and half yesterday, the reversal higher can be viewed as a natural reaction. Traders need to be careful and should use their risk taking tactics in a thought out manner, but if current resistance levels prove strong, selling the USD/CAD and looking for the 1.28600 mark to be challenged again the in the short term may be a solid wager.

If the USD/CAD moves below 1.28600 and the 1.28500 then becomes vulnerable, lower depths could come into view which were seen yesterday. The USD/CAD does have the potential to produce volatile results, but looking for additional downside price action in the short term may be the right wager.

Canadian Dollar Short-Term Outlook

Current Resistance: 1.28775

Current Support: 1.28575

High Target: 1.28970

Low Target: 1.28212

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The NZD/USD remains within eyesight of long term depths, but a slight reversal higher in trading today has given the Forex pair some short term positive vigor.

As of this writing the NZD/USD is trading near the 0.62260 mark, which is actually a successful reversal higher above the lower values seen before going into the weekend.  A ratio of nearly 0.61465 was seen on Friday, which tested values challenged in May of 2020. However, the NZD/USD has also been within the grasp of a rather steady and incremental bearish trend when looking at long term charts. A high of approximately 0.74765 was touched momentarily in February of 2021.

Technical traders would be right to say the direction of the NZD/USD hasn’t been a simple speculative road to take advantage.  While the price action has been downwards, it has been achieved with a fairly steady diet of choppy conditions. This underscores the necessity of making sure risk taking tactics when pursuing the NZD/USD are locked into place. And the rather choppy conditions as long term lows are being touched also raise the question about if and when the weak New Zealand dollar will begin to establish a real change of direction.

The adage the trend is your friend in Forex is apt and often true. The USD has proven a powerful source of energy the past eight months against many of the major currencies as it has generated buying because of the steady rise of interest rates from the U.S Federal Reserve. Traders may be asking if additional hikes from the U.S central bank have already been digested into the NZD/USD.

While the NZD/USD has gained some momentum today from short term reversals higher, it should also be remembered that U.S is on a full banking holiday today because of Independence Day celebrations.  The move higher this morning may not be facing as much resistance as usual because of the lack of U.S financial institutions being involved within Forex today.

If the lack of institutional trading proves to be the case, traders may have a chance to speculate on potential reversals lower developing again. If the NZD/USD reaches technical resistance seen on the 29^th and 30^th of June near the 0.62540 vicinity it may prove to be an interesting place to ignite selling wagers for those who believe downside price action is not finished.

Near term the NZD/USD should be monitored and treated carefully because of a lack of volume, which may be occurring due to the absence of the Americans.  Upon their return tomorrow, Tuesday could prove to be rather volatile and speculators are urged to make sure risk management is in place. While higher levels may be demonstrated short term, tomorrow’s price action and Wednesday’s will deliver real clues about existing sentiment.

NZD/USD Short-Term Outlook

Current Resistance: 0.62350

Current Support: 0.62003

High Target: 0.62609

Low Target: 0.61459

A fall in value early this weekend to new long term depths did put AVAX/USD under 14.0000 briefly, a slight reversal higher has occurred but lows remain in sight.

As of this morning, AVAX/USD is trading near 15.6500, this after being able to reach a high of nearly 16.3400 late on Sunday. Avalanche has suffered a severe fall in value like its major counterparts, but its low water marks on Saturday which went below the 14.0000 still managed to float above prices seen in mid-August and late July of 2021. The broad cryptocurrency market remains extremely fragile, and technically while reversals higher have been achieved in the past half day, lows are clearly within sight and threatening.

AVAX/USD produces fast trading and price velocity has been dangerous the past few days. Speculators brave enough to participate in cryptocurrencies, should certainly use stop loss and take profit orders while engaging in trading. If current support levels of 15.2000 begin to see a flirtation and start to appear vulnerable, speculators may believe that further lows will rapidly be demonstrated. A fall below the 15.1000 mark could stir additional selling in AVAX/USD.

While broad market conditions remain extremely nervous and Avalanche is in sight of long term lows, technical traders may be intrigued that AVAX/USD still has lower depths to explore.  If the bearish trend stays intact and the slight bounce higher produced yesterday and early today fade, AVAX/USD could begin to test lower depths below the 15.0000 which may attract the attention of more bearish speculators.

Yes, AVAX/USD could certainly move higher and reversals upwards should always be expected, because no asset moves in one direction when trading. However, the long term downward trajectory within the cryptocurrency market and Avalanche are self-evident, and betting against this trend should be done only with extreme caution and great risk taking tactics. Being a contrarian under the current market conditions may prove to be extremely dangerous, thus maintaining a selling stance appears to be the logical choice for most traders.

If AVAX/USD does traverse slightly higher and challenges resistance near the 15.7000 to 15.8500 ratios, speculators may want to consider short positions.  If Avalanche cannot maintain a price above the 16.0000 juncture and continues to keep its lower depths within sight, traders may want to prepare for the potential of the lower trajectory to stay in effect. Selling AVAX/USD remains the seemingly worthwhile wager for speculators in the near term.

Avalanche Short-Term Outlook

Current Resistance: 16.09000000

Current Support: 15.18000000

High Target: 17.12000000

Low Target: 13.98000000

The market continues to be a situation where traders are willing to fade the rally, especially as the US dollar continues to be very strong.

Gold markets rallied a bit on Wednesday as we continue to see this market grind back and forth. That being said, the market is more likely than not going to continue to be a scenario where buyers are going to be short-lived, as the US dollar is without a doubt the big winner as of late. The markets will continue to be very noisy, but ultimately, I do think that all of the noise above will continue to be a major issue for traders to overcome.

Gold markets have been pummeled by the US dollar’s strength, and it is worth noting that we stopped right at the 200-day EMA and the futures market. This is an area where you would expect a lot of technical selling, so be interesting to see whether or not we can continue to go higher. If we do, there are plenty of areas above that could come into the picture to cause problems. The most obvious place for me is going to be the $1883 level, where we had fallen from previously. That was an area that had seen a lot of downward pressure and sent the market down to its current levels. One would have to assume that there is a certain amount of market memory in that area, so I do think we probably have quite a few traders waiting to get involved at that level.

The market continues to be a situation where traders are willing to fade the rally, especially as the US dollar continues to be very strong. As long as that correlation still remains, it is difficult to imagine a scenario where I would get long in this market, especially as the 50-day EMA sits at the $1906 level and is sloping lower. I will be looking for signs of exhaustion that I can take advantage of. The market will continue to be very noisy, but that is not a huge surprise considering the CPI came out so hot during the day, and the Federal Reserve is most certainly in play. That being said, let the market rally a bit and then start looking for signs to get short. If we do break down below the lows of the session for Wednesday, it is very likely that we could go looking to reach the $1800 level.

In general, this is a market that will remain noisy, but if you take your time, you can take advantage of the overall trend.

The British pound has rallied a bit during the course of the trading session on Wednesday to reach towards the 1.31 handle. That being said, the Federal Reserve announcement obviously had an effect on the market, so now the question is whether or not they will continue to tighten? It is likely that we will see a series of interest-rate hikes, but it could have been worse.

That being said, the Federal Reserve also kept the door open to adjusting things, so this might be part of why we are seeing the British pound recover a bit. Regardless, the currency had been oversold, so it does make a certain amount of sense that we would see a bit of a bounce. The 1.32 handle above could be a bit of a resistance barrier, as there was a bit of selling pressure in that general vicinity. If we break above there, then the next target would be the 1.34 handle.

On the downside, the 1.30 level would of course end up being supportive, as it is an area that has been tested previously and of course, it is a large, round, psychologically significant barrier. Breaking down below that would obviously be a big deal, but it is clear that we could not do it initially. The market breaking down below there could open up the possibility of a move down to the 1.28 handle, which is also an area where we had seen support previously.

Simply put, I believe this is a market that you should be fading rallies, as there are a lot of concerns out there that will continue to be a problem. The market will continue to be looking for safety at times, and that means the US dollar. It is a simple matter of being overstretched at this point, so I do think that we probably are due for this bounce, and I will simply step to the side and wait to see whether or not I get an opportunity to pick up “cheap dollars.” I have no interest in buying this pair unless, of course, something changes fundamentally around the world and of course from the perspective of risk appetite. At this point, I just do not see that being the case anytime soon. In general, this is a market that will remain noisy, but if you take your time, you can take advantage of the overall trend.