Trading idea on major pairs: 3rd October -7th October
2 years ago forexsimulation 0
In the last few weeks, the EURUSD pair has been moving in between 1.1120 – 1.1270 level. The volatility of this pair has been decreased to great extent due to the uncertainty of interest rate hike decision by the FED. In the last FOMC meeting minutes, the FED has clearly announced that they are not going to hike the interest rate till December 2016.This has given a piece of relief into the mind of investors and traders are willing to buy the EURO at the dip. Finally, it seems like the EURO is ready to build some fresh buying pressure in the market accompanied by the dovish statement by FED. In the upcoming week, no strong impact news is there for the mighty EURO. On the contrary, the Non-farm employment claims data will be released on Friday. To be precise, the fundamentally the EURUSD pair might show very less volatility till Friday. The very first news of the week is the ISM manufacturing info in this week. This scheduled release might create some sort of volatility in the EURUSD pair. Compared to important news releases of EURO the green bucks has much more for its investors. Though the interest rate hike was postponed during the last FOMC meeting minute but if the upcoming data starts to come in green then there is a strong possibility of an interest rate hike in the month of December.
Though the FED has given some hope that they will hike their interest rate in the month of December but some economic researchers are suggesting that the current rate hike decision by the FED will be never triggered till the mid of 2017.We can expect an increased volatility in the EURUSD pair during the month of November due to US presidential elections. In the last week, the EURO has closed at 1.1236 level which was the same price in the very beginning of the week. This type of closing generally indicates prolonged ranging movement of the price.
The NZDUSD pair has declined to great extent in the previous week even though the US economy is falling apart due to interest rate hike crisis. Currently, the price is forex trading around the 0.72594 level and traders are expecting strong support near the 0.7200 level mark. The key reason behind the sharp decline in the NZDUSD pair remains with the positive US macroeconomic data. Economic researchers are suggesting that the mighty USD might recover its losses to a great extent on the release of US GDP data. There has been a sharp rise in the US GDP than the forecasted data. The indicator showed a growth of 1.4% which tends to cross the forecasted data of 1.3%.But the fall is limited by the nearest key support in the NZDUSD dollar since the FED members failed to hike their interest rate in the last meeting. Most importantly there is no chance that FED is going to hike their interest rate before the month of December. If the major support level at 0.7200 level fails to hold then we will see a retest of the 100 days daily SMA in the daily chart. The dynamic support of the daily resistance is currently at 0.7120 level. Traders are expecting a strong bounce in the Kiwi pair since the current economic condition of the US is pretty weak compared the Kiwi dollar. Advanced data researcher suggests that there might be consolidation period in the NZ currency in this week since RNBZ sentiment value grew from 15.5 to 27.9 in the month august.
The daily uptrend in the AUDUSD pair is still intact and traders are expecting a strong bullish momentum in this pair due to severe weakness in the US economy. Currently, the price is testing major trend line resistance at 0.7680.The recent week is pretty important for Aussie dollar since there are lots major economic news releases. The cash rate decision and the RBA rate statement is going to decide whether the long-term bearish trend line resistance will hold or not. A valid break above the trend line resistance at 0.7680 level will bring a strong upward rally in the pair toward the next critical resistance level at 0.7850 level mark. A valid break of that level will confirm the end of the long-term bearish trend in the market. On the contrary, if the pair manages to retreat back in the southward direction then the first initial bearish target for this pair would be 0.74000 marks. Shorting the pair at the current price level with tight stop loss definitely favors out technical analysis but the current weakness of the mighty US dollar argues against going short in this pair. However, traders can use a tight stop loss to sell at the trend line resistance. If the 0.74000 level fails to restrict the bearish momentum of this pair then we will see a sharp fall in this pair towards the 0.7165 level. But before hitting that level the pair needs to breach the 100 and 200 days daily SMA in the daily chart. The retail sales data will also play a vital role in the next move of the Aussie dollar. If the data comes out positive then we can expect bullish sentiment in the AUDUSD pair till the Nonfarm employment claim. Considering all the parameters, short entry can be executed in this pair with a tight stop loss. But selling this pair at the current price level will be bit aggressive since the green buck is pretty weak against its all major rivals fundamentally.