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Hello fellow traders. In this technical blog we're going to take a quick look at the past Elliott Wave charts of NZDUSD. We're going to explain the structure and see how we guided our members through this instrument.

The chart below is $NZDUSD 4 hour chart from 02.28.2017. Our analysis suggests the price is correcting the cycle from the 0.6854 low. First leg W red has ended on 02/14 as expanded flat. On 02/21 date we got lower low: wave ((b)), and we got bearish sequences from the peak. In a mean time short term structure got little bit tricky. X red connector turned into irregular Flat correction. Our Elliott Wave analysis suggests X red is done at 0.7246 high. Consequently, the pair is ideally within Y red leg, looking for more downside, targeting 0.70044-0.69469 area.

NZDUSD 4 Hour Chart: 28 February

Now let's take a look at the short term structures:

NZDUSD 1 Hour Chart: 24 February

X red is done at 0.7246 high and as far as the price holds below that level further weakness should ideally follow. Current 0.71925-0.71783 area can provide 3 wave bounce before decline resumes.

NZDUSD 1 Hour Chart: 28 February

Short term price x red correction has turned into irregular flat against the 0.72466 peak. So far, the mentioned peak has held nicely and we're forecasting further decline within Y red leg toward 4 Hour target at 0.70044-0.69469

NZDUSD 1 Hour Chart: 1 March

We got nice decline and separation from the peak. As the pair has made new short term low we got more clue in proposed bearish view and we're recommending selling the rallies in 3,7,11 swings to our members. Currently price is showing clear 3 swings from the low suggesting that potential sell area comes at 0.7154-0.7184 .

NZDUSD 1 Hour Chart: 4 March

The pair found sellers at 0.7154-0.7184 and short term correction ended at 0.71692. We got nice decline as expected. Although the price reached 4 hour target at 0.7004 , due to a market correalation and incomplete pull backs in the rest of commoditiy instruments we switch short term count little bit and calling for 5 wave structure in the cycle from the 0.7247 peak, where ((ii)) ended at 0.71692. Currently about to complete short term ((iv)) bounce , looking for further extension lower. Next technical area comes roughly at 1.236 fib extension :0.6946. (According to 4 hour chart we presented above)

GBP/USD has posted losses in the Tuesday session. In North American trade, the pair is trading at 1.2130. On the release front, US PPI dipped to 0.3%, above the estimate of 0.1%. Later in the day, UK releases the CB Leading Index. Traders should be prepared for volatility, with a host of key indicators on both sides of the pond. The UK will release three employment indicators - Average Earnings Index, Claimant Count Change and the unemployment rate. The US will publish CPI and retail sales reports. As well, the Federal Reserve is widely expected to raise the benchmark rate to 0.75 percent.

The political machinations over Brexit have continued this week. On Monday, the House of Lords backed down and voted through the Brexit bill without making any changes. This move means the bill will be passed into law, allowing Theresa May's government to trigger Article 50 and formally declare Britain's intent to leave the European Union. There had been speculation that May might invoke Article 50 on Tuesday, but the government said it will not do so until later in March. Under Article 50, the negotiations are slated to take up to two years. Relations between Britain and the EU have nosedived since the stunning Brexit vote in June. The timing of invoking Article 50 comes at a particularly delicate time for Europe, as the Netherlands holds elections on Wednesday and France goes to the polls in April.

Strong US employment numbers in February have cemented a rate hike by the Federal Reserve on Wednesday. Nonfarm payrolls sparkled in February, as the indicator jumped to 235 thousand, easily beating the estimate of 196 thousand. Wage growth climbed 2.6% compared to February 2016, while the participation rate edged up to 63.0%, up from 62.9%. These numbers make it a virtual certainty that the Fed will raise rates by a quarter-point on Wednesday. Although a rate hike has been priced in by the markets at 93%, there have been disappointments in the past, so a rate move will likely give the dollar a boost against its major rivals. The solid job numbers also give President Trump a much-needed boost. Trump is under pressure to present an economic agenda, but the markets won't mind giving him some additional breathing room, with the economy performing so well.

USD/CHF - 1.0085

Most recent candlesticks pattern : N/A

Trend                                    : Sideways

Tenkan-Sen level                  : 1.0085

Kijun-Sen level                    : 1.0081

Ichimoku cloud top                 : 1.0113

Ichimoku cloud bottom              : 1.0097

New strategy  :

Stand aside

Position : -

Target :  -

Stop : -

Despite yesterday’s marginal fall to 1.0060, lack of follow through selling on break of previous support at 1.0065 and current rebound suggest further consolidation above yesterday’s low would be seen and gain to 1.0110-20 cannot be ruled out, however, a break of resistance at 1.0142 is needed to signal the retreat from 1.0171 (last week’s high) has ended, bring another rise towards this level later.

On the downside, below said support at 1.0060 would signal the fall from 1.0171 top is still in progress and may bring further fall to 1.0035-40 but support at 1.0009 should remain intact, bring rebound later. As near term outlook is still mixed, would be prudent to stand aside in the meantime.

GBP/USD - 1.2154

Most recent candlesticks pattern   : N/A

Trend                                 : Near term down

Tenkan-Sen level                 : 1.2137

Kijun-Sen level                    : 1.2180

Ichimoku cloud top              : 1.2201

Ichimoku cloud bottom        : 1.2188

New strategy  :

Stand aside

Position : -

Target :  -

Stop : -

Cable’s intra-day selloff signals recent decline has resumed, hence downside risk remains for further fall to 1.2100, however, loss of downward momentum should prevent sharp fall below 1.2070 and reckon 1.2040-50 would hold from here, sterling may stage another rebound from there later.

In view of this, would not chase this fall here and would be prudent to stand aside in the meantime. Above the Kijun-Sen (now at 1.2180) would suggest an intra-day low is formed instead, risk rebound to 1.2215 but break there is needed to confirm and bring a stronger rebound towards resistance at 1.2251.

EUR/USD - 1.0639

Most recent candlesticks pattern   : N/A

Trend                      : Near term up

Tenkan-Sen level              : 1.0652

Kijun-Sen level                  : 1.0677

Ichimoku cloud top             : 1.0665

Ichimoku cloud bottom      : 1.0613

Original strategy  :

Bought at 1.0640, Target: 1.0740, Stop: 1.0610

Position : - Long at 1.0640

Target :  - 1.0740

Stop : - 1.0610

New strategy  :

Hold long entered at 1.0640, Target: 1.0740, Stop: 1.0610

Position : - Long at 1.0640

Target :  - 1.0740

Stop : - 1.0610

Although the single currency has slipped again today and marginal weakness from here cannot be ruled out, reckon downside would be limited and as long as previous resistance at 1.0615 (now support) holds, mild upside bias remains for another rise, above 1.0680 would suggest the retreat from 1.06714 has ended, bring retest of this level, break there would extend the erratic rise from 1.0493 low to 1.0740-45 (1.5 times projection of 1.0495-1.0640 measuring from 1.0525) but loss of upward momentum should prevent sharp move beyond 1.0760 (1.618 times projection of 1.0495-1.0640 measuring from 1.0525).

In view of this, we are holding on to our long position entered at 1.0640. Below previous resistance at 1.0615 would abort and signal top has been formed, risk further fall to 1.0575-80 first. 

On the hourly chart of S&P500, we can see that price is currently trading sharply lower within higher degree wave C as part of a three wave corrective decline. Well, if that is the case, then even more weakness may show up within the mentioned wave C. Current bearish breakdown is regarded as sub-wave iii, that may extend its gains, probably below the previous swing b-circled and to around the 2347/2350 region. Afterwards a minor correction may pop up as sub-wave iv.

S&P500, 1H

USD/JPY - 114.66

Most recent candlesticks pattern   : N/A

Trend                      : Near term up

Tenkan-Sen level              : 114.88

Kijun-Sen level                  : 114.87

Ichimoku cloud top             : 115.00

Ichimoku cloud bottom      : 114.88

New strategy  :

Stand aside

Position :  -

Target :  -

Stop : -

As the greenback has retreated after meeting resistance at 115.20, retaining our view that further consolidation below last week’s high at 115.51 is in store and risk of another fall to 114.48 (yesterday’s low) cannot be ruled out, however, reckon downside would be limited to 114.26 support and as this move is viewed as retracement of recent upmove, reckon downside would be limited to 114.00-05 (38.2% Fibonacci retracement of 111.69-115.51) and price should stay well above strong support at 113.56-61), bring rebound later.

In view of this, would be prudent to stand aside for now. A firm break above 115.20 would suggest an intra-day low is formed, bring a stronger rebound but still reckon said resistance at 115.51 would cap upside. Only break there would revive bullishness and extend recent upmove to previous resistance at 115.62, then towards 115.90-00. 

The USD/CAD is in strong uptrend as shown on yesterday Session Recap webinar. Current POC zone is 1.3420-50 and as long as 1.3385 stays strong we might see 1.3550 followed by 1.3600 and 1.3650. The POC (L3, inner trend line, order block, EMA89, narrow triangle breakout) should spike the pair to the upside on subsequent retests towards above mentioned levels. The MACD turned bullish again and no divergence is present so this trade setup is a continuation from yesterday successful USD/CAD setup shown on the webinar.

Increasing for the fourth consecutive month, the PPI for final demand increased 0.3 percent in February. The month's gain was led by services, however, solid price gains were recorded elsewhere.

Stronger-Than-Expected Headline Gain

Accounting for over 80 percent of the headline's gain, final demand services increased a solid 0.4 percent on the month. Final demand goods prices rose for the sixth consecutive month, up 0.3 percent, largely on higher energy prices.

Our preferred measure of core PPI, which excludes energy, food and trade services, also increased 0.3 percent, signaling some acceleration in the underlying trend of core inflation.

Pipeline Pressures Building

On balance, pipeline pressures continue to build. Intermediate processed goods increased for the sixth straight month, up 0.4 percent, with the gain tied to price gains outside of food and energy. Unprocessed intermediate goods slipped 0.2 percent, in part, on a 4.3 percent drop in energy materials prices.

In short, producer prices were stronger than expected, keeping a rising inflation outlook in 2017 as the base case.

Oil price fell on Tuesday, marking fresh extension of steep downtrend from $53.80 lower top that was paused on Monday, for brief consolidation. Renewed weakness comes on comments from OPEC about oil inventories that continued to rise, despite the global deal to cut supply. OPEC countries agreed to curb their production by 1.2 million barrels per day from Jan 1, while non-OPEC producers agreed to cut half. Strong bearish sentiment that was established of recent sharp fall that also took out psychological $50 support, after holding above it for three months, now threatens of further weakness. Today's acceleration is now firmly below $48.00 handle and pressuring next targets at $47.32/17 (Fibonacci 261.8% expansion of the wave C from $53.78, on which the price is currently riding/Fibo 61.8% of $42.19/$55.22 upleg). The wave could extend to its FE 300% at $46.38, possibly to $45.27 (Fibo 76.4% retracement) on strong bearish sentiment. Broken 200SMA ($48.71) that capped action on Monday/today, marks strong barrier and guards psychological $50.00 resistance (also daily cloud base), which is expected to limiti extended upticks.

Res: 48.71; 50.00; 50.82; 51.21

Sup: 47.32; 47.17; 46.38; 45.27