Market Movers: Commodity Currencies Look Oversold

Market Movers: Commodity Currencies Look Oversold

good morning good afternoon and good evening to all myself well the markets are pretty much indeed back mood today with not much movement seen across the asset classes some commodities like steel iron ore are seeing selling pressure in today’s session as well which can be termed as the continuation of the theme of the week the week has been particularly bad for commodity prices as most have declined as a result of resurfacing of concerns regarding the sustainability of demand as delta variant is likely to limit the possibility of return to total normalcy anytime soon the commodity exporting countries and their respective currencies are also facing the headwinds as a result we have seen the currencies like australian dollar and the new zealand dollar nose dive in this week while the us dollar has gained ground in this session of market movers will be paying attention to one such currency the new zealand dollar from the broad basket of commodity currencies the new zealand dollar has been in downturn for quite a while now in this week itself it has lost heavily against the u.s dollar on the lower side though it is holding on the levels around 0.6 for last two sessions it looks likely it might consolidate for few more days around the currently oversold levels we will be looking for sculpting opportunities in it to try to capitalize on current situation there are no economic releases scheduled for the united states if we look at the data releases which we got earlier in the day the retail sales for the united kingdom and letter from the canada need to be looked into the united kingdom’s return sales declined by 2.5 percent in terms of month on month for the month of july it is contrary to the expectations of a rise decline is being observed in multiple subcategories like food secondhand goods clothing etc resulting in the steepest decline since january of this year for canada the retail sales numbers are for june not for july so we have to take note of this the canada is also likely to witness a decline when the data will be released for july but for the month of june there was a jump of 4.2 percent now let’s uh see what’s happening in the technicals we will uh consider the output for lcd usd first and then we will also take a look on the dollar index and the trading opportunities there in let’s start with the nz usda’s technical outlook this is the daily timeframe chart and here as you can see then the usd has declined almost 250 pips in this week it started closer to 0.7050 and now here we are looking at it at 0.68 and after this decline of more than 3 percentage point i think we might see it consolidate on the lower side and it will be interesting to see how the day starts on monday now that the now that we are wrapping up the week i’m not really expecting any big moves in today’s session the new zealand station was also muted and in the us also there is not much of a movement but there are trading opportunities which might come away if we are willing to go for the scalping trades if on the lower side current to the closer to the current level the nz usd holds and in that case we can start looking for buying opportunities on the lower side and we can expect the retracement to take it closer to this prior consolidation high so that possibility is there and we will see how we can try to capitalize on that for uh to optimize the entry we will have to pay attention to the lower time frame formation where we have seen the ncd usb cross below the first support of business pivot point series and right now it has been holding closer to this consolidation phase and if we look at the immediate support on the lower side it is going to be there around a second support of this one pivot which is there around 0.676 [Music] which is almost 60 to 70 pips away from the current levels but looking at the price formation for last two sessions it is uh possible that in the usd might not decline much from the current levels of course the bias still remains bearish but comes some sculpting traits can be taken and we can count on it to rise towards these prior consolidation phase lows which can be considered as the near term resistance if we look at the regression curve it has now inclined on the lower side as the decline has been quite sharp in this week and it is not likely to change anytime soon and as and when we will have this retracement we can again start looking for fresh shorting opportunities for any new trade to be initiated we will have to allow the 50 sma to catch up with the price action and whenever that happens and if and when the led us climbs above 50 smith that will be more appropriate time to start looking for buying opportunities while keeping the stop loss just little below the immediate swing low so today that might not be the case but i think on monday we might see these opportunities coming our way and on the higher side we can expect to move towards 100 sma at the very least and the stop loss is not going to be much wide the stop loss as i said can be kept just little below the immediate swing low and 50s mesh would be our target zone and on the higher side we can expect to move over 0.69 so that is going to end tell us a risk reward ratio of even better than one is to two but we have to be watchful and go for the trade only after there is a consolidation starts to give way for some police tendencies in near-term now let’s consider the technical outlook for dollar index this is the daily time frame chart and we have a fresh breakout of sort for dollar index dollar index has now successfully climbed above and formed a new swing high the price being high stands broken which had limited the upside in prior run but after this correction which uh took the dollar index closer to 92 from there on it has picked up the momentum again and this time around it looks likely that 1000 days is going to go all the way towards 94 but in the meantime we can expect some correction after this share price of almost 100 basis points in the dollar index and some correction if that does happen is also be going to be a good opportunity for us whenever we will wanting whenever we will be wanting to initiate the new long trades on the higher side the rise has stalled started closer to these uh second resistance of this most period series here considering the fact that our index moves quite slowly it’s not it’s not my not a good opportunity or you can say optimum opportunity to start to look scalping opportunities for dollar index but if we get some correction and if the dollar index holds above this prior swing highs the price zone around 93 is going to be crucial in that case we can again start betting on the continuation of this bullish momentum and on the higher side we can then look for the bridge above this immediate resistance and they move toward the 94 level for optimizing the trading entries we can take help of these smes we have the 50 sme catching up with the price action which is around 93 so we will need some sort of correction in the null index first and as and when these sms catch up with the price action and if the dollar index holds above the prior consolidation highs closer to these lows as well so the price area to watch out for is going to be above 93 and as long as dollar index remains upon 93 i think we can be fairly confident of the continuation of this bullish momentum and in course of time i am expecting the dollar index to rise towards 94 at the minimum so that’s my take looking at the current price formation of the dollar index if any of you have any query or any idea to share you can write to me the feedback section and i would be more than happy to take the discussion forward before i sign off i would also like to remind of the risks associated with trading the financial instrument and everyone should be careful while using the information provided for further coverage of the market developments you can check out the microscopy analytics page for starting to trade the j4x platform is at your service we are also available on the facebook links for all these three have been provided you can check it out thank you all for joining in have a fabulous and profitable day ahead and an equally fabulous weekend see you on monday till then goodbye
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Market Movers: Commodity Currencies Look Oversold

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