NZD/USD rebounds following PBOC

aud_nzd1Perhaps, not surprisingly, it has been the Aussie and Kiwi which have responded the most to the PBOC (People’s Bank of China) move to devalue the yuan, with the AUD/USD completely erasing last Friday’s and Monday’s gains to end yesterday’s trading session just over the key 0.73 level. Further falls overnight has seen the pair tumble to 0.7224 since when it has staged a remarkable comeback in the London session to trade (at time of writing) at 0.7330. The move off the session lows has also co-incided with our last VPOC supoort line on both the daily and weekly charts. On the daily chart the first target for AUD/USD is the VPOC resistance at 0.7395, followed by further resistance at 0.7438, and yesterday’s high.

However, the extent of the comeback for both pairs can be seen on the hourly charts where it has been the NZD/USD which has proved the stronger of the two with the decisive move away from the VPOC line at 0.6541 on good, solid volume. This acceleration away this price point has also been reflected in the Currency Matrix where on the hourly chart the NZD/USD is the strongest pair, at time of writing.

The pair is now attempting to move through resistance in the 0.6616 region which also co-incides with a high volume node on the VPOC, and here the pair may struggle as it attempts to regain and test yesterday high at 0.6633. And once again it will be volume which will determine whether this level is achieved.

 

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