NZD/USD Intraday technical levels and trading recommendations for September 20, 2017


Daily Outlook

In February 2017, the depicted short-term downtrend was initiated around the depicted supply zone (0.7310-0.7380).

However, a recent bullish breakout above the downtrend line took place on May 22. Since then, the market has been bullish as depicted on the chart.

The price zone of 0.7150-0.7230 (Key-Zone) stood as a temporary resistance zone until a bullish breakout was expressed above 0.7230.

This resulted in a quick bullish advance towards the next supply zone around 0.7310-0.7380 which was temporarily breached to the upside.

Recent bearish pullback was executed towards the price zone of 0.7310-0.7380 (newly-established demand-zone) which failed to offer enough bullish support for the NZD/USD pair.

Re-consolidation below the price level of 0.7300 enhances the bearish side of the market. This brings the NZD/USD pair again towards 0.7230-0.7150 (Key-Zone) where recent weak bullish recovery was manifested earlier in September.

An atypical Head and Shoulders pattern is being expressed on the depicted chart indicating high probability of bearish reversal.

The current price levels of 0.7320-0.7350 can be watched for a valid SELL entry if enough bearish rejection is expressed.

Breakdown of the neckline 0.7150 confirms the reversal pattern. Expected bearish targets are located around 0.7050, 0.6925 and eventually 0.6800.

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Intraday technical levels and trading recommendations for EUR/USD for September 20, 2017


Monthly Outlook

In January 2015, the EUR/USD pair moved below the major demand levels near 1.2050-1.2100 (multiple previous bottoms set in July 2012 and June 2010). Hence, a long-term bearish target was projected toward 0.9450.

In March 2015, EUR/USD bears challenged the monthly demand level around 1.0500, which had been previously reached in August 1997.

In the longer term, the level of 0.9450 remains a projected target if any monthly candlestick achieves bearish closure below the depicted monthly demand level of 1.0500.

However, the EUR/USD pair has been trapped within the depicted consolidation range (1.0500-1.1450) until the current bullish breakout was executed above 1.1450.

The current bullish breakout above 1.1450 allows a quick bullish advance towards 1.2100 where price action should be watched for evident bearish rejection and a valid SELL Entry.


Daily Outlook

In January 2017, the previous downtrend reversed when the Head and Shoulders pattern was established around 1.0500. Since then, evident bullish momentum has been expressed on the chart.

As anticipated, the ongoing bullish momentum allowed the EUR/USD pair to pursue further bullish advance towards 1.1415-1.1520 (Previous Daily Supply-Zone).

The daily supply zone failed to pause the ongoing bullish momentum. Instead, evident bullish breakout is being witnessed on the chart. The next Supply level to meet the pair is located around 1.2100 (Level of previous multiple bottoms) where bearish rejection and a valid SELL entry can be anticipated.

On the other hand, If bearish pullback persists below 1.1800 and 1.1700, the price zone of 1.1415-1.1520 can be watched for a valid BUY entry.

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Fundamental Analysis of EUR/JPY for September 20, 2017

EUR/JPY has been bullish in nature recently after breaking above the corrective structure resistance of 132.00. In light of recent positive economic reports and the hawkish statement of ECB President Draghi, the currency has been quite dominating JPY and it is expected to sustain in the long run as well. Recently, EUR Current Account report was published which showed an increase to 25.1B from the previous figure of 22.8B which was expected to decrease to 22.3B, German ZEW Economic Sentiment report published with significant growth to 17.0 from the previous figure of 10.0 which was expected to have a slight increase to 12.3, and ZEW eurozone Sentiment report was published with an increase to 31.7 from the previous figure of 29.3 which was expected to be at 32.4. Today, EUR German PPI report was published with an unchanged value at 0.2% which was expected to decrease to 0.1%. On the other hand, today Japan's Trade Balance report was published with an actual result of increase to 0.37T from the previous figure of 0.36T but it failed to meet the expectation of 0.41T. To sum up, though JPY was not quite better with the economic reports today as EUR, JPY was quite strong to hold the gains rather than losing some grounds to EUR today which is expected to lead to short- or medium-term bearish pressure in the market before EUR takes off the price with further gains on the upside.

Now let us look at the technical chart. The price is currently showing some bearish pressure in the market after the positive economic reports from the eurozone. It means indicates that the price is going to retrace towards 132.00 level before showing some upward move in the coming days towards the target of 134.30. As the price remains above the 130.60 level, the bullish bias is expected to continue further.


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Global macro overview for 20/09/2017

Global macro overview for 20/09/2017:

The European Central Bank (ECB) once again tried (ineffectively) verbally intervene against further strengthening of the Euro currency. According to the Reuters agency, "anonymous sources" informed, that there were discrepancies in the Governing Council of the ECB as to the future decision regarding the quantitative easing program. Some representatives from richer countries want a definite end to the intervention, while the presidents of the countries of the south of Europe are merely supporting the idea of reducing the amount of the Euro the EBC spends on the QE. As a result, perhaps the October meeting will be used to reach a compromise on this issue, and final decisions will only be made in December. Meanwhile, the value of the ECB's assets is growing and reached 40% of the Eurozone GBP in August (compared to 28% for the Fed). It is quite obvious that the ECB should end the program in December and not even extend it beyond March next year. Leaders of the Governing Council, however, dominate the "dovish" point of view headed by Mario Draghi, so financial market participants still believe the odds are the QE will also be running in 2018.

Let's now take a look at the EUR/JPY technical picture on the daily time frame. The market just hit the 78%Fibo retracement of the previous swing down at the level of 134.31 and this is the last level of resistance before the test of the long-term high at the level of 141.14 might occur. Nevertheless, the clear bearish divergence between the price and the momentum indicator is likely to make the bears regain control over the market and the technical support at the level of 131.39 will be tested first.


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Daily analysis of major pairs for September 20, 2017

EUR/USD: A bullish signal has just been generated on the EUR/USD pair. Price made some bullish attempt and it is now above the support line at 1.2000, going towards the resistance line at 1.2050 (which is the first target). The second target is the resistance line at 1.2100.


USD/CHF: This pair is still consolidating. For a directional movement to start, price would either need to go below the supply line at 0.9500 (staying below it); or price would go above the resistance level at 0.9700, causing a bullish signal to be generated. A movement below the support level at 0.9500 would strengthen the overall bearish outlook.


GBP/USD: Although it has consolidated so far this week, there is still a Bullish Confirmation Pattern in the GBP/USD 4-hour chart. When a breakout does occur, it would be in favor of bulls as price is expected to go towards the distribution territories at 1.3550, 1.3600, and 1.3650, which would all be reached before the end of the week.


USD/JPY: There has been a slight bearish correction on this currency trading instrument, and that could be the beginning of the expected bearishness in the market (which could happen before the end of this week). The EMA 11 is above the EMA 56 and the RSI period remains above the level 50. This situation would change once price nosedives by 200 pips, swiftly or little by little.


EUR/JPY: This currency trading instrument went upwards by another 160 pips this week, and further upwards movement is possible. However, price is expected to be corrected soon downwards before the end of the week; something that would be somewhat difficult to achieve as long EUR has some stamina in it.


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