Hey tradomaniacs,
I`m currently waiting for the FED to give the market more fundamental impulses.
Looking at NZD/USD we can see a secondary downtrend within a triangle which finds support at the wekly key-support-level.
Triangles are always tricky due to lots of fakeouts but also breakouts against the actual trend, which is according to the textbook, not usual since the triangle is a trend-continuation-pattern.
NZD/USD will be very tricky because we don`t know how equities are going to react to a potential tapering.
We could either see cashflow out of stocks more into bonds due to higher exepctations for rate-hikes in the future, or cashflow from value into growth and vica verse. (Other sectors would become more interesting)
If we get hawkish tones by the FED, the US-Dollar will go up against the NZD.
The frist scenario would cause risk-off and so less demand for the New Zealand Dollar. If NZD falls and USD rises, we could see a strong breakout to the downside.
The second scenario could cause a less volatile NZD/USD, but still with uncertain moves due to a strong US-Dollar.
I overall think stocks are overheated and this rally is based on liquidity that has been provided.
Let`s see! :-)
LEAVE A LIKE AND A COMMENT - I appreciate every support! =)
Peace and good trades
Irasor
Wanna see more? Don`t forget to follow me
I`m currently waiting for the FED to give the market more fundamental impulses.
Looking at NZD/USD we can see a secondary downtrend within a triangle which finds support at the wekly key-support-level.
Triangles are always tricky due to lots of fakeouts but also breakouts against the actual trend, which is according to the textbook, not usual since the triangle is a trend-continuation-pattern.
NZD/USD will be very tricky because we don`t know how equities are going to react to a potential tapering.
We could either see cashflow out of stocks more into bonds due to higher exepctations for rate-hikes in the future, or cashflow from value into growth and vica verse. (Other sectors would become more interesting)
If we get hawkish tones by the FED, the US-Dollar will go up against the NZD.
The frist scenario would cause risk-off and so less demand for the New Zealand Dollar. If NZD falls and USD rises, we could see a strong breakout to the downside.
The second scenario could cause a less volatile NZD/USD, but still with uncertain moves due to a strong US-Dollar.
I overall think stocks are overheated and this rally is based on liquidity that has been provided.
Let`s see! :-)
LEAVE A LIKE AND A COMMENT - I appreciate every support! =)
Peace and good trades
Irasor
Wanna see more? Don`t forget to follow me