USD Movement to be Driven by Yellen Speech
NZD/USD Testing Resistance on Trend Line
The Kiwi has been having a rough few days on the charts. As we can see on the hourly time frame, NZD/USD has been trading lower and lower since the beginning of August. In fact, if we connect the most recent highs from August 18 to August 20, a falling trend line will form.
If you’re looking to jump in on this down trend, now may be your chance. The currency pair bottomed out at .8350 in yesterday’s trading. Since then, it has been slowly creeping higher, paring some of its losses from Wednesday. The Kiwi’s resilience is about to be tested though. It’s about to reach the .8400 psychological handle which coincides perfectly with the falling trend line. The area also lines up nicely with the 61.8% Fibonacci retracement level of the high from August 20 at .8413 to Thursday’s low at .8346.
A few reversal candlesticks including a handful of dojis have already materialized around the area which could mean that the pair may soon be on its way down the charts. However, don’t be so sure about it just yet. Who knows, there may still be enough buyers in the market to push price well above .8400.
Possible Pullback to Previous Highs on USD/CHF
The dollar’s dominance isn’t only limited to the Kiwi. The Swiss franc also has been giving a whole lot of ground to the Greenback for the past few days. USD/CHF has been on a strong uptrend since August 15. In fact, the currency pair even established a new 7-month high over the past week when it hit .9145.
But of course, everything comes to an end, even the dollar’s strength. A bearish engulfing candlestick pattern just materialized and Stochastic already indicates overbought conditions for USD/CHF. Could it be that the currency pair is headed down south soon?
Maybe. However, keep tabs around .9060 to .9120 where the Fibonacci retracement levels of the low from .9017 to the swing high at .9145 can be found. After all, the currency pair could only be looking for a little pullback before extending its rally. It’s also worth noting that the 200 SMA also looks to be hovering between these levels. Lastly, USD/CHF previously faced resistance in the area last week as well as back in July.
Reversal candlesticks could mean that buyers are ready to take the currency pair higher. On the other hand, a strong bearish close below .9060 where the 61.8% Fibonacci level is, we could see USD/CHF drop to its previous low at .9017.
AUD/USD Testing Resistance on the 100 SMA and Falling Trend Line
It seems that the Aussie is having a really good start for the day. AUD/USD has been able to pare the losses it incurred since today’s trading opened. From a low of .9228, the currency pair is now up over 50 pips. However, don’t get ahead of yourself and call this move an Aussie comeback just yet. A few signs are apparent on the hourly time frame which suggest that we could be seeing nothing more than just a pull back.
For one, price is currently testing resistance on the falling trend line which you get if you connect the highs from August 19. The area just below the .9300 major psychological handle also nicely coincides with the 100 SMA which has provided AUD/USD with support and resistance in the past.
Will the 100 SMA and falling trend line hold?
We’ll have to wait for candlesticks to find out. Dojis below the .9300 psychological handle could mean that there are enough sellers in the market to take AUD/USD lower, possibly all the way down to its previous low at .9228. On the other hand, a close above .9300 handle could mean that there are still enough buyers in the market which could possibly take the currency pair all the way up to .9400.