The US dollar has pulled back a bit during the trading session on Wednesday, as American traders were away for Independence Day. I believe that a bounce in the way we have and forming a bit of a hammer at the previous downtrend line suggests that we are going to make another go at the ¥111 level, which of course would be a very bullish sign if we can overcome it. Keep in mind that this market is extraordinarily sensitive to risk appetite and of course the headlines coming out of both the United States and China, so if we get some type of shock, this market could move suddenly. Right now though, it looks as if the US dollar is trying to pick up strength late in the day against most currencies, and it also appears that the Japanese yen will be any different.
The New Zealand dollar has done almost nothing during the trading session on Wednesday as a lot of liquidity would have been taken out of the market due to the Americans celebrating the holiday. We tried to rally towards the 0.68 level but sold off drastically and formed a bit of a shooting star. The shooting star of course is a negative candle, and I think it shows that we are going to continue to reach to the downside, perhaps having another go at the 0.67 level. If we can break above the 0.68 handle, the market could bounce to the 0.69 level, but I think at that point the 50 EMA would come in on the daily chart and offer a bit of psychological resistance as well. In other words, this is a sell only market and I’m looking for signs of exhaustion or negative pressure to start selling again.
This article provided by NewsEdge.