USDJPY Bulls in Control; Open Calls Today
USDJPY Return of Bullish Momentum | Resistance at 120.00
USDJPY resumed its strong ascent, after nearly a month of consolidation in a descending triangle pattern. Price broke to the top of the formation then pulled back for a quick retest before surging past the previous highs around the 119.00 mark.
With that, traders might now be setting their sights on the 120.00 major psychological handle as the next target for the USDJPY pair. There have been no major reports released from the United States and Japan earlier in the week, although the former has more lined up towards the end.
Today, the ADP non-farm employment change report is due and a slight slowdown in hiring is expected. A higher than expected increase in jobs could lead to strong dollar gains though since traders might start pricing in upbeat expectations for the NFP release on Friday. On the other hand, a bleak ADP reading might force traders to book profits off their dollar longs in anticipation of a downbeat NFP report and weaker Fed rate hike projections.
As for Japan, there are no major reports due until the end of the week, leaving the yen functioning mostly as a counter currency. The path of least resistance is still to the upside for this pair though, as the BOJ remains a dovish central bank in light of the recent recession in Japan and expectations of weaker inflationary pressures.
EURNZD Symmetrical Triangle | Potential Breakout Scenarios
EURNZD can’t seem to pick a clear direction for now, as price consolidated tightly inside a symmentrical triangle pattern on its 4-hour time frame. The pair might find resistance at the top of the triangle around the 1.5950 minor psychological mark and support at the bottom around 1.5900.
A break to the upside could mean around 300 pips in gains, which is the same height as the chart pattern. This could push EURNZD to the 1.6250 minor psychological resistance, which has held as a ceiling so far this year. Similarly, a downside break could mean around 300 pips in losses, which could lead EURNZD down to the 1.5600 major psychological support zone.
Fundamentals suggest a downside bias for this forex pair, as the ECB is mulling further easing measures in order to stoke inflation in the euro zone. The New Zealand dollar is being weighed down by another decline in dairy prices, which could lead to cut in milk payouts from Fonterra to farmers and suppliers.
The upcoming ECB interest rate decision could be the main catalyst for a breakout in either direction, as the announcement of actual easing could lead to more losses for the shared currency.
Downside Momentum in GOOG Shares | Resistance Near 50 SMA
GOOG shares seem to be resuming their downtrend, as price is showing an increase in selling pressure in a move back to the previous lows. Shares came close to testing the dynamic resistance at the 50 simple moving average but resumed their drop before even making contact.
A selloff could lead to a drop until the $520/share level or all the way down to $500/share. RSI is reflecting a pickup in selling momentum, as the oscillator is heading south towards the oversold area. Once the indicator crosses out of the oversold zone though, a quick bounce is still possible.
MACD is on middle ground, barely offering any directional clues at the moment. Price is testing a short-term area of interest around the $530/share level anyway, which could lead to a bounce and a test of the 50 SMA resistance.
A break past the resistance zones could mean a return in buying momentum and more gains for GOOG shares. Risk aversion spurred by geopolitical tension and falling commodity prices is weighing on US equities in the meantime, dragging GOOG shares lower i