NZD/USD Fails to Extend Near-Term Bullish Series Ahead of NFP Report

Talking Points:

GBP/USD Paves Larger Relief Rally Amid Easing Fears of ‘Hard Brexit.’

NZD/USD Fails to Extend Near-Term Bullish Series Ahead of NFP Report.



GBP/USD Daily Chart

Chart – Created Using Trading View

  • GBP/USD breaks out of a slight operation and looks staid for a incomparable service convene as Eurogroup President Jeroen Dijsselbloem talks down a risk of a ‘hard Brexit’ and assures that a dual regions can lift adult new agreements to concede a U.K. ‘to enter a inner marketplace and to concede trade to continue;’ a pound-dollar might extend a allege from progressing this week on a tighten above a Fibonacci overlie around 1.2630 (38.2% expansion) to 1.2680 (50% retracement) generally as a Relative Strength Index (RSI) threatens a bearish arrangement carried over from May.
  • The ongoing pickup in risk view accompanied by a agreement within a Organization of Petroleum Exporting Countries (OPEC) to cut oil prolongation might lift Bank of England (BoE) officials to adopt a some-more hawkish tinge during a last-2016 seductiveness rate preference on Dec 15, and Governor Mark Carney and Co. might uncover a larger eagerness to gradually pierce divided from a easing-cycle as executive bank officials advise ‘there are boundary to a border to that above-target acceleration can be tolerated.’
  • Another unsuccessful try to tighten above 1.2630 (38.2% expansion) to 1.2680 (50% retracement) might lift GBP/USD behind towards channel support, with near-term support 1.2370 (50% expansion), yet a serve allege in a sell rate might coax a pierce behind towards former-support around 1.2920 (100% expansion) to 1.2950 (23.6% expansion).


NZD/USD Daily Chart

Chart – Created Using Trading View

  • Failure to safety a new array of aloft highs lows undermines a near-term miscarry in NZD/USD, with a span during risk of confronting serve waste over a subsequent 24-hours of trade as marketplace courtesy turns to a prominence expected U.S. Non-Farm Payrolls (NFP) report, that is expected to uncover another 175K enlargement in November; might see a kiwi-dollar continue to prune a miscarry from 0.6971 should a labor news prominence an softened opinion for expansion and inflation.
  • A broader change in marketplace function appears to be holding figure as NZD/USD breaks down from a ceiling trend carried over from progressing this year, yet uninformed remarks from a Reserve Bank of New Zealand (RBNZ) might extent a downside risk for a sell rate as Governor Graeme Wheeler endorses a wait-and-see proceed going into 2017; nevertheless, a executive bank might keep a doorway open to serve embark on a easing-cycle while appearing before Parliament’s Finance and Expenditure Committee on Dec 7 as a RBNZ warns ‘numerous uncertainties remain, quite in honour of a general outlook, and process might need to adjust accordingly.
  • With a broader opinion for NZD/USD slanted to a downside, a break/close behind subsequent 0.7040 (50% retracement) might eventually coax a some-more suggestive run during a subsequent downside aim around 0.6950 (38.2% retracement), that lines adult with a Jul low (0.6951).

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  • The DailyFX Speculative Sentiment Index (SSI) shows a sell throng stays net-long GBP/USD even after a British Pound ‘flash crash,’ with FX view induction a 2016-extreme reading of +5.97 during a prior month, while traders have flipped net-long NZD/USD only forward of December.
  • GBP/USD SSI sits during +1.17 as 54% of traders are long, with brief positions 26.5% aloft from a prior week even as open seductiveness stands 3.1% subsequent a monthly average.
  • NZD/USD SSI sits during +1.04 as 51% of traders are now long, with prolonged positions 25.3% reduce from a prior week as open seductiveness stands 4.2% subsequent a monthly average.
  • Even yet a sell throng stays net-long GBP/USD, view continues to slight from a 2016-extreme following a near-term allege in a sell rate, with a SSI ratio imprinting a lowest reading given September.

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— Written by David Song, Currency Analyst

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