USDJPY, US Stock Weakness to Dominate for the Short Term
EURNZD Short-Term Pullback | Selling Opportunity at 1.5300
EURNZD is showing signs of a pullback, after price bounced off support near the 1.5000 major psychological level. Using the Fibonacci retracement tool on the latest swing high and low on the 1-hour time frame shows that the 38.2% Fibonacci retracement level lines up with the 1.5300 handle, which might act as resistance.
Stochastic is still moving up, indicating a return in buying pressure, which might be enough to take price up to the 1.5300 potential resistance zone. Further gains past this point could mean a larger correction, and the 50% or 61.8% Fibonacci retracement levels might also hold as resistance.
Talks of a potential exit by Greece from the euro zone have been weighing on the shared currency’s price action as it could mean a return of debt troubles in the region. There are no main reports due from the euro zone today, suggesting that political updates and risk sentiment could drive price action.
There are also no reports lined up from New Zealand in the next trading sessions, although China reported a strong trade balance reading earlier today. This provided a bit of support for the commodity currency as improvements in the world’s second largest economy could mean more demand for New Zealand’s exports.
USDJPY Descending Channel | Resistance at 118.0
USDJPY is trending lower on its 1-hour and 4-hour charts, creating a descending trend channel for the short term. Price is nearing the top of the falling range and is ready to test resistance near the 118.00-118.50 psychological levels.
If these levels hold, price could head back to the bottom of the range and form new short-term lows near the 117.00 major psychological support. There are no major reports due from both the US and Japan today, suggesting that price action could be mostly dependent on risk sentiment.
For tomorrow, the US retail sales release might be a bigger catalyst for this setup, as strong data could mean gains for the dollar and a potential upside break from the channel resistance. On the other hand, weak data could lead to more losses for the US currency and a potential break below 117.00.
The headline figure is slated to show a 0.2% increase while the core figure could print a 0.1% uptick in spending. With a streak of stronger than expected hiring gains in the past months and falling oil prices, there’s a good chance that the actual data could surprise to the upside.
Ebay Shares Testing 50 SMA | Support at $55/Share Level
After retreating from the longer-term resistance level around the $58/share area recently, Ebay shares are now testing near-term support at the 50 simple moving average on the daily time frame. A bounce off this dynamic inflection point could mean another test of resistance and a potential upside break if risk appetite picks up.
On the other hand, a break below the 50 SMA could mean a move lower to the next support area, right around the 200 SMA or the $53/share area. Further losses could take Ebay shares to the bottom of the long-term range at $50/share.
US economic data has played a role in determining how Ebay shares might fare, as the recent FOMC statement and NFP release led investors to think that the Fed is still looking to tighten this year. This could mean more expensive investment for businesses, which could then limit their expansion and profitability.
Should data indicate that the US central bank shouldn’t be tightening monetary policy just yet, US equities could gain support and retest its highs in the previous year. After all, the promise of prolonged low rates could support spending and business activity.