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USD/CAD – NZD/USD Market Analysis

USD/CAD pair Dangling around the button while on the formation of the Inverse Head and Shoulder chart pattern.

Will the key support level hold or should the pair break down and continue selling? Keep Reading!

Economic News on CAD

Core Retail Sales m/m:

Auto deals account for about 20 Retail Deals, but they tend to be truly unpredictable and distort the underlying trend. The Core data is hence allowed to be a better index of spending trends.

The data is released monthly, about 50 days after the month ends. This is also known as Retail Deals Ex automobiles, if’ Factual’ greater than ‘Forecast’ is good for the currency.

TimeCurrencyForecastPrevious
8:30 amCAD2.6%-1.0%

Retail Sales m/m

It’s the primary index of consumer spending, which accounts for the majority of overall profitable activity.


This is released monthly by Canada Statistics, about 50 days after the month ends, if’ Actual’ is higher than ‘Forecast’ good for the currency.

TimeCurrencyForecastPrevious
8:30 amCAD2.0%-0.6%

USD/CAD Observation

Firstly the Usd/Cad pair has been in a bearish market over months then around May/June it made an extreme Lower Low which resulted in a bullish reversal.

USD/CAD - NZD/USD Market Analysis
USD/CAD Analysis by Chikwem Chinedu Ogugua on Liquiditytradeideas

However around the 3rd quarter pair rallied up as a result of some economic News releases and tested the key level of 1.28000, pulled back, and re-tested multiple times as the 3rd quarter comes to an end.

Moreover from the start of the current (4th) quarter bears pushed the price down where it broke the higher lows made during the 3rd quarter, Pair is currently on a key support level of 1.23000.

Technical Indicator

USD/CAD Analysis by Chikwem Chinedu Ogugua on Liquiditytradeideas

Using our stochastic indicator we can closely observe that the SMA’s are already in the oversold level which technically indicates that sellers are exhausted and buyers setting in to push the price back to the top (Neckline).

Simple Moving Averages(SMA). Usd/Chf Pair is positively correlated and is needed to be observed closely for additional clues.

Conclusion

Economic News release by Federal Reserve (Fed) and that of Core Retail Sales m/m in addition, if more hawkish than expected and the pair holds on the key support level 1.23000, pair may be expected to bounce off and rally up as a result of bears cutting out and bulls setting in.

NZD/USD

Surprised as a falling wedge a bullish continuation pattern speculated by technical traders breaks out to be a rising channel, Well to find out what the market has for us continue reading.

Economic News on USD

Flash Manufacturing PMI:

A Survey of about 800 purchasing directors asks responders to rate the relative position of business conditions including employment, product, new orders, prices, supplier deliveries, and supplies.

It’s a leading index of economic health- businesses respond fast to demand conditions, and their purchasing managers hold maybe the most current and applicable perception into the company’s view of the economy.

Above 50.0 indicates industry expansion, and below indicates compression. There are 2 forms of this report released about a week apart – Flash and Final. The Flash release, which the source first reported in May 2012,

If the foremost and therefore tends to have the most impact. This is released monthly, around 3 weeks into the current month, if ‘Actual‘ is greater than ‘Forecast‘ good for the currency.

TimeCurrencyForecastPrevious
9:45 amUSD60.560.7

Purchasing Managers’ Index (PMI).

Fed Chair Powell Hearings

Due to partake in a virtual panel discussion named”Monetary and fiscal stability challenges to central banks in the wake of COVID-19″ at an online conference hosted by the South African Reserve Bank.

Fed Chair Feb 2018-Feb 2022. Fed Governor May 2012-Jan 2028. Volatility is frequently endured during his speeches as traders strive to decrypt interest rate leads.

Being head of the central bank, who controls short-term interest rates, he has more influence over the nation’s currency value than any other person.

Traders view his public engagements as they frequently used to drop subtle leads regarding coming financial policy. More hawkish than anticipated is good for the currency. Federal Reserve (Fed).

Pair Observation

Firstly from the start of the 2nd quarter to the end of the 3rd quarter Nzd/Usd pair on the daily chart has been on a formation of a technical chart pattern known to be a falling wedge.

However, during the process of falling wedge formation pair was making lower highs and lower lows which broke out as speculated earlier this 4th quarter.

USD/CAD - NZD/USD Market Analysis
NZD/USD Analysis by Chikwem Chinedu Ogugua on Liquiditytradeideas

Moreover, before the breakout after a short sell, the pair traded into the previous low, failed to make a lower low which is considered to be truncation or failed low, and attracted the bulls, therefore, resulting in a breakout.

Additionally, the (SMA’s) of the Forex technical indicator is precisely at the over-bought level which signifies that buyers are exhausted and a pullback might be in play.

Simple Moving Averages(SMA). NZD/USD and AUD/USD are positively correlated.

Conclusion

NZD/USD pair broke the falling wedge and made a higher high closing a few pips above the previous high, With the Hearing from the Federal Reserve (Fed) and clues from the stochastic indicator and as a result that pair has tested the resistance of the upward channel, a pullback/ retracement is likely to occur.

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