The NZDUSD pin bar reversal / false-break signal that we discussed in our August 19th commentary has resulted in a significant move lower today. In the chart below, we can see the market is currently trading just above support near 0.7935 as Wednesday’s Asian trading session gets underway. Anyone who shorted on yesterday’s sell signal is up a very nice profit right now, and our members’ discussion forum was buzzing with discussion of the key level near 0.8105 in anticipation of a signal there, and after yesterday’s pin bar formed many of us pounced on it. From here, we could see the market either break down through 0.7935 and continue lower, or we could get a bounce from support near current level (0.7935 area), overall our bias is still bearish in the near-term.
The GBPUSD rally that we’ve seen recently appears to be losing some steam. The market is approaching a very important level of resistance up near 1.5750. Traders should watch key resistance up near 1.5750 – 1.5800 if price moves into it, as it could be a good potential sell level if we get a daily chart price action sell signal in that zone of resistance between 1.5750 – 1.5800 area.
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Forex Commentary:
In the currency markets today, the U.S. dollar lost significant ground to the euro and fell to a two-month low versus the Swiss franc as traders and investors remain uncertain as to when the Federal Reserve will change its current economic stimulus policy.
Tomorrow’s FOMC Meeting Minutes report released at 2PM New York time (Wednesday) could cause some volatility in the major Forex pairs and especially the USD quoted pairs like EURUSD, GBPUSD, NZDUSD, etc.
The New Zealand dollar dropped about 1.1 percent against the greenback as the Reserve Bank of New Zealand announced new home lending restrictions and said the NZD was over-valued.
Other Markets:
In the U.S. markets today, stocks were mixed as uncertainty over when the Federal Reserve will scale-back its stimulus policy continued.
The Dow lost 7.75 points, or 0.05 percent, the S&P 500 added 6.29 points, or 0.38 percent, and the Nasdaq gained 24.50 points, or 0.68 percent.
Upcoming important economic announcements (New York time): 8/21/2013
10:00am EST: United States – Existing Home Sales
2:00pm EST: United States – FOMC Meeting Minutes
9:45pm EST: China – HSBC Flash Manufacturing PMI
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