Don’t ignore the Kiwi – it can deliver some great trades!

A currency often overlooked by forex traders is the New Zealand dollar, which is a great shame because this commodity dollar can often deliver some impressive and consistent trades, particularly on the slower time frames. And for a reason we only need to glance at the daily chart of the currency strength indicator. Following a sharp move lower in August towards the oversold region of the CSI, the New Zealand dollar then spent the next four weeks trying to move away from this region, before finally finding some traction towards the end of September. Since then the NZD has moved sharply higher against most of its counterparts, with a number of pairs lifting off simultaneously. Of the pairs which make up our NZD matrix, it has been the NZD/USD and NZD/JPY which have delivered some of the best trades, followed by the GBP/NZD and EUR/NZD. The move higher in the NZD/USD followed a period of consolidation for the pair as it bumped along...
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Cable approaches key level

Cable continues to remain very weak for the time being, and is now approaching the tipping point of a potential deeper move once we have a strong close below the psychological 1.50 price point, which is clearly marked on the weekly chart by the support and resistance indicator. At the same time the VPOC (volume point of control) is also weighing heavily on the pair, and should the above level be breached then a further cluster of support awaits below in the 1.48 region. Any failure here will see cable move into a low volume node in the 1.46 region, last seen in March this year from which cable managed to stage a sustained recovery.  ...
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Eurodollar continues to frustrate

Eurodollar continues to frustrate traders, and it's easy to see why. Since the failure to breach 1.1713 the pair has retreated back into the range of the VPOC (volume point of control) in the 1.1170 region where it continues to remain waterlogged. With end of month and end of quarter position squaring we will have to wait to see whether eurodollar can finally break away from this region. From a technical perspective the heavy selling of 6 weeks ago is self evident with the extreme volume and deep upper wick to the candle telling their own story. Since then the pivots have helped to define the floor and ceiling of the congestion zone, and with volume now building on the VPOC histogram any move away is likely to be extreme and accompanied with strong participation. The key level to any move to the downside is 1.1128 where strong support awaits.  ...
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Aussie finding some bullish momentum

Of the three commodity dollars, namely the Aussie, Kiwi and Loonie it is perhaps the Aussie which finally appears to be showing signs of a potential reversal from its oversold state on the slower time frames of our currency strength indicatort (the blue line). And of the Aussie pairs it is perhaps the AUD/USD and AUD/CAD which appear the most interesting. Starting with the AUD/USD it was the failure in May to break through the resistance at 0.8160 which was the start of the its downards descent which saw the pair finally find some support at 0.6906 on the Friday before the Labor Day Holiday in the US. And whilst this level was tested once again last Monday, since then the AUD/USD has managed to claw its way back to 0.7138 at time of writing. Such positive sentiment and similar price action can also be found on the daily chart of the AUD/CAD where the test of support at 0.9149 on the...
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Eurodollar regains its bullish mojo

At last Thursday's ECB press conference it was enough for Mario Draghi to hint at further QE for the eurodollar to sell off sharply, taking the pair from a high of 1.1243 before coming to rest at the support platform at in the 1.1087/96 region. This support platform was tested again on Friday as a degree of buying for the pair stepped in ahead of the Labor Day holiday in the US and Canada. And whilst the start of this week has seen relatively muted price action for eurodollar given Monday's holiday, the tone of this action has been overall bullish with each session threatening to take the pair through and away the volume point of control in the 1.1200 price region. This has materialised in today's trading session which has seen eurodollar move from a low of 1.1171 to trade, at time of writing at 1.1278. The 1.1171 low also coincided with the `100 ma which has also added its...
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Bears take hold of cable

Today's reversal in cable has once again taken the pair back to the VPOC (volume point of control) support which sits in the 1.5573 price region. This price area is where cable has been rotating since early July, and despite what appeared to be a decisive break away on Monday when cable touched a high of 1.5803, yesterday's down candle has had the effect of creating a classic two bar reversal. Therefore, no surprise to see the resulting fall in today's trading session where cable has fallen over 200 pips. Today's price action has not only taken cable below the VPOC for the first time since early August but also seen a break through the 100 ma, and with today's move supported with good volume the next stop for cable would appear to be 1.5424 on the daily chart. Moving to the hourly chart cable has found some good support at 1.5466, a price point first hit by a volatility candle earlier...
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Eurodollar bears take control

Although the market is focused on tomorrow's release of the FOMC minutes, an event guaranteed to cause a degree of market volatility, it is the release of the CPI and Core CPI numbers earlier in the session which are probably even more important. Of the two releases it is the Core CPI the FED pays the most attention to, and a big influence on the likely timing of any rise in interest rates. Meantime, the USD appears to have found its mojo once again following last week's dramatic fall, with the eurodollar bearing the brunt of this resurgence. The daily chart for the eurodollar is particularly interesting where weakness for the pair started last week with the failure to break and hold above the VPOC (volume point of control) in the 1.1167 price region. Friday's close below the 100 ma appears to have been the catalyst for a pick up in bearish sentiment for eurodollar which saw the pair close yesterday's trading...
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CSI highlights GBP sell off

Ahead of the release of the Monetary Policy Minutes from the RBA, and tomorrow's CPI number for the UK, it's been interesting to see how the Aussie and British pound have been behaving in today's trading session. And of the two currencies it has been the British pound which has seen some heavy selling against both the USD and the Aussie. The hourly chart of the CSI (currency strength indicator) highlighted the extent to which the British pound was overbought, and Cable's failure to take out the resistance at 1.5688 signaled the start of a reversal in fortune for the pair and a move lower of over 100 pips.  And it has only been a combination of the VPOC at 1.5585 and support at 1.5578 that has prevented any further move lower for Cable. Moving to the GBP/AUD  here too we have seen a move lower for the British pound with the pair eventually finding support at 2.1094 from which we have...
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And now we wait for the forex market to open!

Have been reading that carnage is expected and word is EUR/USD has already dropped to 1.1029 - although my MT4 hasn't started as yet, so we will have to wait & see. Meantime here are some levels for some of the euro pairs : EUR/USD - was already bearish & shorts at CFTC increased last week. Putting the 1.1029 aside for the time being - 1.1052 is the first level of support & if breached 1.0819 comes into play where a high volume node on the VPOC awaits. EUR/JPY - Has been in congestion for a number of days having failed to breach the 140.78 price point & now looking to turn bearish. The immediate level below is at 137.57 with any move through here then likely to test the 136.69 region. The VPOC continues to remain in the 134.94 region for the time being and should this be taken out then a longer term bearish trend will ensue. EUR/AUD - The interest rate...
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Forget the euro, look at the British pound!

In all the brouhaha about Greece and the euro it's easy to forget what else is going on in the forex market. Sometimes I feel Greece is taking up too much space in traders' heads at the expense of other markets and currencies. And for a perfect example of what I mean look no further than the continued strength in GBP which has seen some great trends in GBP/NZD & GBP/CAD & I'm still waiting for the GBP/JPY to turn lower, but only once we see a major reversal in risk sentiment. On both charts the NinjaTrader trend monitor has remained firmly bullish with only a minor transition on the GBP/CAD reflecting the recent pause in the longer term trend. However, moving to the NinjaTrader currency strength indicator to the left of the chart, here we can see that the British Pound, the yellow line, is now moving ever deeper into the oversold region on the daily timeframe, so this trend...
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