AUD/NZD probing a 5+ year trend line

09. March 2016 · Write a comment · Categories: EDGE Chart of the Day · Tags: , ,

This chart has been on my radar for a very long time. I have had a “love/hate” relationship over the last year with this currency pair as we have seen some “near trend line breaks” mid year last year. I had high hopes we would break, but never transpired.

We are faced with a similar situation now with the pair quickly approaching the 1.1100 key resistance for the pair. The reason why its so important is that a little later today we have the RBNZ (Reserve bank of New Zealand) making a decision on rates. Most expect the RBNZ to stay on hold, but some of us expect that they could open the door to future cuts in the coming meeting(s).

I have long argued on the Morning EDGE webinar that the slowdown in China has already been priced into the AUD currency, but the NZD currency has been slower to price it in. Now that China is New Zealand’s largest trading partner, I feel that this “repricing” will eventually occur, and it will be seen predominately in the AUD/NZD exchange rate.

Here is the current chart in the AUD/NZD on a weekly basis where you can see the massive trend line:

3-9-16AUDNZD1

Back in January I also mentioned the bigger pattern that is developing (and becoming more symmetrical), the inverted H&S pattern:

3-9-16AUDNZD2

 

Blake Morrow

Chief Currency Strategist, Wizetrade

 

Disclaimer: I have built a long position in the AUD/NZD over the last several weeks and am looking to add to my position if the pair breaks above the 1.1100 level in the coming days (on a closing basis)

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AUD/USD clears 14 year trend line and major Fibonacci “clusters”

04. September 2015 · Write a comment · Categories: EDGE Chart of the Day · Tags: ,

The AUD/USD will close firmly below the 14 year uptrend line. What’s worse for the AUD currency, we have cleared a major grouping (or cluster) of major Fibonacci levels from the .7100-.7200 level. In my opinion, any rally towards the .7100 level will find a very strong wall of sellers.

There is not much longer term support until the .6200 level, which represents a very strong support level following the financial crisis of 2008.

9-4-15AUDUSD

 

Blake Morrow

Chief Currency Strategist, Wizetrade

 

 

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Copper is Consolidating in Break Down Territory

03. June 2015 · Write a comment · Categories: EDGE Chart of the Day · Tags: , ,

A trader I follow, @faaaal , brought to my attention the pivotal level that Copper is at. I found the daily chart to be particularly interesting as we are consolidating below the daily triangle breakdown point. You can see the longer term here:

6-3-15HG

If you focus in a little closer, this is what you see:

6-3-15HG1

I don’t trade copper, but I do trade the AUD currency, which tends to be influenced by copper from time to time. Currently, I am long the AUD on a cross, so I will be watching copper very closely.

 

Blake Morrow

Chief Currency Strategist, Wizetrade

 

Disclaimer: I have no position in copper and do not plan to in the coming days.

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AUD/NZD Poised to Challenge Long Term Trend Line

02. June 2015 · Write a comment · Categories: EDGE Chart of the Day · Tags: , ,

The AUD/NZD is poised to break higher. Not only is the downtrend line (about 1.0850) about to be challenged, but the pair has also developed a “bull flag” pattern and looks poised to move towards the 1.1450 level (also major retracement level) in the coming weeks. In addition, the recent pullback to 1.0575 was a shallow 38.2% Fibonacci retracement (not shown). Take a look at the chart below:

6-2-15AUDNZD

 

Blake Morrow

Chief Currency Strategist, Wizetrade

 

Disclaimer: I have been establishing a long AUD/NZD and will be adding to the position in the coming days.

 

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GBP/AUD set to rally if AUD CPI comes in weak

21. April 2015 · Write a comment · Categories: EDGE Chart of the Day · Tags: , ,

Tonight at 9:30PM ET Australia is set to report CPI data, and as you can see below inflation has consistently ticked lower the last few quarters:

4-21-15AUDCPI

 

The GBP/AUD has been in a tight consolidation recently, and as you can see (blue lines) we have have had some very consistent rallies while in this solid up channel (yellow):

 

4-21-15GBPAUD

 

Blake Morrow

Chief Currency Strategist, Wizetrade

 

Disclaimer: I do not have a position in the GBP/AUD currently, but may establish a trade after tonight’s data release

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Copper Breakdown Suggests a Lower AUD/USD Rate

28. November 2014 · Write a comment · Categories: Uncategorized · Tags: , ,

One of the stronger correlations (over time) between currencies and commodities is the strong Australia Dollar and Copper correlation:

11-28-14AUDHG

Today, copper made a significant surge lower breaking key technical support at 2.88. At minimum, copper looks set to test the 2.50 (Fibo) support:

11-28-14HGweekly

If you take a good look at the AUD/USD weekly chart, it looks set to test below .8000:

11-28-14AUDWeekly

For the last couple years I have been looking forward to getting on the long side of the AUD/USD below .8000, and it looks like this time it could actually happen. However, one has to wonder….If the Dr. (Copper) has a PHD in economics, what is this current move suggesting? Some would think that the good doctor has either failed a few classes on the way to getting the PHD or royally screwed up his/her dissertation. But with China continuing sluggish growth (relatively speaking) and global deflationary pressures mounting, perhaps we should pay a little closer attention to what the doctor is telling us.

 

Blake Morrow

Chief Currency Strategist, Wizetrade

 

Disclaimer: I am short the AUD/USD from 2+ weeks ago.

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AUD/NZD showdown set for tomorrow, “High Noon”

10. June 2014 · 2 comments · Categories: Uncategorized · Tags: , ,

Well, it will be “High Noon” somewhere tomorrow, right?

The AUD/NZD is technically in breakout territory, but tomorrow is going to be a big day for the pair. Tomorrow afternoon we have the RBNZ rate decision, and a couple hours after we have the Australia employment numbers for May.

Keeping in mind, technically the pair is pointed to a move of 1.1300 (from the double bottom, retest of neckline) in the coming weeks, the combination of tomorrow’s news could set the pair off in that direction. (see chart below)

6-10-14AUDNZD

The RBNZ is expected to raise rates another .25% tomorrow 3.25%. This would be the 3rd hike in 3 meetings. The market has priced in a total of 8 hikes in the next 2 years to 4.5%. There is some skepticism that the market may have overpriced two more hikes in 2014. In the event the RBNZ leads the market to believe that they may not be as hawkish into year-end (especially with housing moderating recently) the NZD currency is at risk for a continued pullback.

Turning attention to the Australia jobs numbers a couple hours later, it must be noted that the last three employment numbers Australia has beat the expectations. I don’t see this time as any different as full time employment also seems to be swinging higher too. Labor force participation rate is ticking lower which may be a concern.

In the event that the RBNZ tones down future rate hike expectations and Australia comes in with a stronger employment picture, it could send the AUD/NZD higher and continue this massive short squeeze that had started earlier this year.

 

Blake Morrow

Chief Currency Strategist, Wizetrade

Disclaimer: I have been long the AUD/NZD since below 1.0900 and maintain my position.

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EDGE Chart of the Day 5-22-14 AUD/CAD

22. May 2014 · Write a comment · Categories: EDGE Chart of the Day · Tags: ,

5-22-14AUDCAD

 

After a near perfect “Gartley” pattern, the AUD/CAD is now in process of completing a Head and Shoulder’s pattern which is commonly seen as a reversal pattern after a strong uptrend. Current target is about .9925

Blake Morrow

Chief Currency Strategist, Wizetrade

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