NZD/USD Technical Analysis

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NZD/USD 1H Chart
NZD/USD 1H Chart
NZD/USD Daily Chart
NZD/USD Daily Chart

Shorted around 0.7820. As of right now, it’s still open.

Trade at your own risk. These are my own opinions and analysis.

Note: The screenshots were taken around the night of Jan 12, 2015.

 

1H Chart:

It’s false breakout because the candlesticks did not close above the line. It’s a weak hammer because it’s in the middle. Stronger hammers should appear on bottom in a clear trend.

OU – Opposite of U                                                                                                                                                                                  I made up OU because of my experience in chart analysis. I realized that formations like that have strong impact most of the time. It consists of 3 candlesticks. OU can appear anywhere. It signals bearish market.  For it to signal bullish market, it has to be in a formation of U. It doesn’t matter what the color of middle candlestick. But it has to be a small body or a doji. First and last candlestick has to be about the same body size with each other.

 

Daily Chart:

I said “more like Double bottom” because it’s not in a “perfect condition” of how real double bottom should look like. It’s in a “good” or “75% out of 100% condition”

As you can see, doji was backed or supported by strong support line.

Bearish Engulfing Pattern was very strong because it was backed or supported by resistance and trend line. It was also supported by small body or doji. Forex market is open 24 hours. You may be asking “why is there gap between doji and first candlestick of engulfing pattern?” The answer is that the doji was closed on Friday 5 P.M and first candlestick of engulfing pattern opened on Sunday 5 P.M.

 

If you have any questions, feel free to contact me anytime.

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US Non-Farm Payrolls

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On January 9, 2015 (Friday), jobs report came out and it was little stronger than expected. 252,000 jobs were added in December 2014. The unemployment rate or jobless rate fell to 5.6% from 5.7%, the lowest since June 2008. I believe jobs rate for January 2015 will fall under 210,000, since many people are or were employed for holiday season only.

The most disappointing news of Non-Farm Payrolls was its earnings report. In December, average hourly earnings for all employees on private non farm payrolls decreased by 5 cents to $24.57. I believe this is only temporary. If it continues to drop, consumers of the business will be making less purchases. Therefore, business’s earnings will be weak too. When non farm payrolls come out for January, the earnings will rise back.

If Europe goes into crisis or recession (higher chance because decreasing inflation > deflation), it will have impact on the US in a negative way.

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Europe in Focus and its impact on the rest.

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Earlier today, German CPI (Consumer Price Index) was released. It was weaker than expected. It’s the lowest since October, 2009. CPI is important for inflation. If it drops more (more likely will), deflation will be here both in Germany and spread to other Euro countries.

Japan is already in recession. Europe most likely will be next. It will spread to UK (United Kingdom). Japan, Europe and United Kingdom all have major impact on the economy of the US (United States). Therefore, United States might join the recession list. It’s like a domino effect. Everything starts from somewhere and spreads.

Greek crisis is worrisome. Greek may default and exit from Euro. Elections will be held 3 days after ECB, on Sunday, January 25, 2015.

On Thursday, January 22, 2015, ECB (European Central Bank) will release interest rates and there will be press conference. It will be closely watched as always. But this time, many are wondering if they will release QE (Quantitative Easing).

I believe ECB will delay QE because Greek elections are yet to be held. After the Greek elections, ECB will act on its next meeting.

 

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