NZDUSD After breaking below the ten-month ascending channel, the NZDUSDconfirmed the six-month head and shoulders reversal last Thursday. The combination of these two breaks signals the likelihood of more losses for the New Zealand dollar.
While I continue to favour the downside, the pair is quickly approaching key support at 0.6966. This area attracted buyers on several occasions between mid-June and late July.
However, the measured objective of this 480 pip head and shoulders pattern doesn’t come in until 0.6585. Right now I see no reason to doubt its validity or the idea that the pair could reach this area over the coming weeks.
Taking that notion one step further, my long-term outlook for the NZDUSD hasn’t changed. An eventual move to the sixteen-year channel support near 0.5930 is still a very real possibility.
I remain short from 0.7331 and also added to the position last week following the close below neckline support.
GBPJPY – Sterling/yen remains strong, looking to buy on pullback
As we have discussed in recent commentaries on the GBPJPY, the trend appears to have turned as the Yen has weakened across the board.
It looks like the GBPJPY found a short-term bottom and has reconnected back through 129.50, note the large bullish pin bar where price reversed from lower to higher and closed above that level.
We are looking to buy above 130.35 and traders can watch for buy signals on any near-term weakness, perhaps near the 21 day EMA dynamic resistance level, looking to target key resistance up near 138.50 area.
S&P500 – S&P500 remains buoyant, still looking to buy on pullback
The S&P500 moved higher again last week as the bullish momentum following the U.S. election continues. Our views haven’t changed on this market; we are still looking to get long on weakness, ideally down near support around 2150.00 area to 2106.00 on a 1 hour, 4 hour or daily chart price action buy signal.
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