Daily Market Review – 30/04/2015

EBAY AND USDCHF SURGE ON TAP THIS THURSDAY AFTRNOON!

Forex

NZDUSD Wedge Breakdown | Next Support at .7100

The downbeat RBNZ statement could be enough to trigger a downside break from the support of the rising wedge pattern on NZDUSD’s 4-hour time frame. Policymakers decided to keep rates on hold for the time being but indicated that they could still ease later on if economic performance continues to weaken.

In contrast, the FOMC dismissed the recent economic slowdown in the US as just a temporary glitch, citing that they could still hike interest rates anytime. They even clarified that they could announce policy changes even without a press conference, which suggests that a rate hike might still be possible in July or August.

With that, the path of least resistance for NZDUSD is to the downside, as a move below the .7600 support area would confirm that the pair is in for a longer-term drop. The chart pattern is roughly 500 pips in height, which means that the resulting selloff could be around the same size and last until the .7100 handle.

Stochastic is still pointing down on the 4-hour chart, suggesting that sellers have enough power to push for a downside break and an extended selloff. However, if buyers take over for some reason, the pair could bounce back to the top of the wedge around the .7750 mark.

 

USDCHF Descending Triangle Break | Potential 600-Pip Drop

After weeks of consolidating inside a descending triangle formation, USDCHF finally picked the downside direction. Price could fall by an additional 600 pips after recently slipping below support at the .9500 major psychological level, as the chart pattern is approximately 600 pips tall.

The recent FOMC statement and the upbeat data from Switzerland were enough reason for the pair to break down, as the former indicated a downgrade in economic outlook while the latter showed some green shoots in the economy. On its 4-hour chart though, stochastic is starting to move up, which indicates that sellers are already exhausted.

With that, USDCHF could still pull up to the broken support at .9500 for a quick retest. If this holds as resistance, USDCHF could resume its long-term drop, possibly until the .8900 to .9000 psychological levels. A higher retracement could still lead to a test of the triangle resistance closer to the .9600 handle.

GDP data from the US has also been pretty dismal, as the report indicated a mere 0.2% expansion instead of the estimated 1.1% growth figure. This was also significantly weaker compared to the previous 2.2% expansion, suggesting that the economy is in a slump.

 

Stocks

EBAY Moving Average Support | Further Price Gains?

EBAY shares are showing signs of bouncing from the long-term support at the moving average on its daily time frame, suggesting that the ongoing uptrend is likely to carry on. Price gapped up in recent trading sessions, reflecting the increased possibility of seeing further upside for this stock.

News that Ebay and PayPal will be diversifying their services turned out to be positive news for the share, as this would allow the former to focus more on marketplace services. Meanwhile, PayPal Group is envisioned to channel its efforts on the changing landscape of payment services.

This could usher in stronger revenue for the company, which benefits from both sectors. Gains for EBAY shares could take out the previous highs around $60/share and move on to $70 or $80 per share soon, as analysts are maintaining a “hold” to “buy” outlook for the stock.

In recent news, the company has offered its one-touch payment to other websites, which would give buyers an easier and faster way to make purchases. Earnings for the company for the first quarter also beat expectations, lending more upside potential as well.