Top Global Market Stories
It has been a great week to be long U.S. dollars. The greenback traded higher against all of the major currencies as investors around the world grew more attracted by the performance of U.S. equities and the rise in Treasury yields. The S&P 500 climbed to fresh record highs today, extending a move that has [...]
Top Trade Ideas
It’s tested the patience of traders since Grok first wanted to trade: How to you catch a fast moving market without committing the cardinal sin of “chasing”? The EUR/AUD is just one of those markets: I don’t have a position in it and I want it. While I have shorts positions in the AUD/USD and [...]
NZD/USD traded to its highest level in almost a year and a half last Friday before reversing sharply to end lower on the day. This left a so called “key day reversal” on the daily charts that warns a broader reversal could be in the works. Normally we don’t give too much credence to such high profile action, but the pattern has developed at a potentially important juncture for the pair from both a price and timing perspective. On the price side of things, Friday’s high in the Kiwi came at a convergence of a pitchfork line connecting the 2011 and 2012 lows and the 78.6% retracement of the 2011 range. Both are technically significant and denote levels where supply is likely to increase.
The bulk of technical analysis is focused on price or the Y-axis of a chart. Very little is attention is put on the X-axis of time – yet it takes up half the space. In our analysis we like to incorporate various techniques that address this oversight. These techniques are not the “Holy Grail”, but they do help identify points on a chart where a reversal (or acceleration) is more likely to occur. We seem to be at one of those junctures now in the Kiwi as a clear geometric relationship exists with the low recorded in early June of last year. A reversal is more likely to occur during this time in our opinion and the rare combination of negative price action at a significant resistance zone during a key time period increases our conviction.