AUD/USD Pair Slump to be Extended

19.11.14

AUD/USD Pair Slump to be Extended

GBPJPY

GBPJPY Support at 182.00 | Triple Top Forming?

GBPJPY found support at  the 182.00 neckline of the previous double top pattern, as the pair bounced and is moving towards the tops once more. Price could pull up to the top of the range around the 184.00 resistance zone as buying pressure returned for the pair.

Earlier today the BOJ confirmed its plans to expand the monetary base by an annual pace of 80 trillion JPY. This is geared towards bringing the country out of recession and stimulating inflationary pressures. With that, the government could still be able to implement the sales tax hike later on if needed, as Japan’s fiscal standing is also unstable.

Further gains past the 184.00 handle could confirm the strong uptrend for the pair, even as the BOE also announced a shift to a more dovish stance. Later today, the BOE minutes should shed more light on what the UK central bank has planned in order to combat inflation as well. Dovish remarks could lead to another round of selling for GBPJPY and perhaps a break below 182.00.

If that happens, price could resume its longer-term selloff and fall by an additional 200 pips, which is the same height as the chart pattern.

AUDUSD

AUDUSD Reversal Pattern | Head and Shoulders Formation

AUDUSD might be in for more losses as a classic reversal signal can be seen on its 1-hour and 4-hour time frames. The pair made a complex head and shoulders formation, indicating that the previous uptrend is about to turn.

If price breaks below the neckline of the chart formation around the .8650 area, the pair could be in for as much as a hundred pips in losses, which is the same height as the chart pattern. This could take the pair to the next area of interest around the .8500-.8550 levels.

On the other hand, a move back above .8700 could indicate that buyers are still in control. Bear in mind though that risk aversion is weighing on the higher-yielding commodity currencies so far as geopolitical tension is bringing uncertainty to the financial markets.

Earlier today the MI leading index showed a flat reading, which indicates that the economy didn’t see much improvement recently. This could keep the RBA in a cautious stance and refrain from tightening monetary policy anytime soon. As for the dollar, on the other hand, the FOMC minutes could emphasize the Fed’s plans to start tightening policy next year and lead to more dollar demand.

NZDUSD

NZDUSD Failed Double Bottom? | Another Test of .7700 Support

Falling dairy and commodity prices are weighing on NZDUSD so far as the pair failed in its attempt to break above the neckline of the longer-term double bottom chart pattern. An upside break past .8000 would’ve meant more gains for the pair, as the Finance Minister recently hinted that the RBNZ might no longer need to intervene in the currency market to keep the Kiwi weak.

However, price is showing increased downward momentum back to the .7700 levels, which is around the previous year lows. A break below this area would show that more longer-term losses are in the cards for NZDUSD, with a potential move until the .7500 mark.

The FOMC minutes release would be the main event risk for this play, as hawkish remarks from central bank officials would show traders that the Fed is ready to tighten sometime next year. Inflation no longer seems to be a concern, with market participants pricing in an early rate hike.

New Zealand PPI figures are also up for release later on and this might provide more clues on where the pair is headed in the longer-run.