News Commentary
Trade tensions still weigh on the markets to cut the traders appetite to risk, to boost the safe havens like the Yen and the Swiss Franc.
However, following the trade adviser Peter Navarro, Trump signalled he may take a less confrontational approach, and that any measures would not just target China, to calm down concerns about the administration’s plans to hit Chinese investment in U.S. tech.
Jonathan Haskel, the Bank of England policymaker said there may be more slack in the UK economy, which would weaken the case for interest rate hikes.
He added that the central bank has scope to cut rates slightly in case of an economic downturn.
Disappointing data came from New Zealand after low ANZ business confidence index came in at -39. The last reading was -27.2.
A big move is awaiting for the NZD as the RBNZ will announce its official cash rate at 09:00 GMT. They are widely expected to not change the rate, to remain stable at 1.75%.
All eyes will be on rate statement with any clue to possible rate hike soon, any dovish sentiment will put more pressure on the currency.
Chart Analysis
USD INDEX
As we expected on the daily chart, the price had reached the key resistance at 95.5 and bounced back from it, powered by divergence on RSI.
The price also had shaped a reversal double top pattern.
So, the index is supposed to get back down to the support zone again of 93.2-92.6, then start its journey to the C wave.
AUD/USD
On the daily chart, the price has reached the support zone of 0.7325-0.7365.
The pair is supposed to find some breath powered by divergence on RSI to reach the key resistance of 0.7515, where the descending trend from the high of February is located.
USD/JPY
On the daily chart, as we expected, the pair bounced from the descending trend from the high of 2017 and the key resistance of 111.1.
As you can see on the chart, the price is moving according to Elliot waves. By forming the A & B waves, we are waiting for the next move down to hit the C level which is located at the support of 106.9 and also to meet the ascending trend from the low of 2016.
So, a possible bounce has started and on its way.
USD/CAD
As we expected before, the price has reached the key resistance level of 1.334.
As we can see the price has reversed from very strong selling area according to many factors, including key resistance level, 78.6% Fibonacci, the upper level of the reversal wedge, forming the Gartley harmonic pattern, and overbought in RSI.
So, the price is expected to go down to the support zone at 1.309-1.299.
NZD/USD
On the daily chart, the price has reached the crucial support zone of 0.682-0.6785, with bearish momentum.
Followed by divergence, if we see a price action there, then the price is expected to get back up again to retest the resistance zone at 0.698-0.703.
If the price breaks this zone, we could see a 0.667 level.
As we expected before, the price has reached the support zone 81.2-80.5 as the price is moving sideways.
So, the price is expected to retest the head of the pattern to again reach the levels of 84-84.4.
