Kiwi bears were installed with inspiration on Wednesday evening following the unexpected rate cut decision by the Reserve Bank of New Zealand which sent the NZDUSD crashing over 160 pips in such a short period. This pair is turning bearish on the daily timeframe and the growing expectations of further rate cuts by the RBNZ in the future should limit how high prices can recover. From a technical standpoint, the candlesticks are trading below the daily 20 SMA while the MACD is in the process of crossing to the downside. Previous resistance around 0.6750 may offer an opportunity for bearish investors to send the NZDUSD lower towards 0.6550. A bullish move back above 0.6850 signals bearish weakness and invalidates this daily bearish outlook.
The heightened expectations over the European Central Bank (ECB) unleashing further stimulus measures to stimulate growth in the Eurozone has left the EURCAD noticeable depressed for an extended period. This pair is heavily bearish as there have been consistently lower lows and lower highs while the MACD trades deep into the downside. The recent bearish engulfment candle should pressure the 1.4500 support and a breakdown below this level may encourage a further decline towards 1.4100. From a technical standpoint, prices are trading below both the 20 and 50 SMA with bears remaining in control as long as 1.4850 defends. If bulls breach and attain a daily close back above 1.4850 then this daily bearish outlook becomes invalidated.
This pair has respected the daily bearish channel and remains technically bearish as long the previous 115.00 lower high defends. The reinstated wave of risk aversion from the ongoing global woes should send the CHFJPY lower as appetite for the JPY receives a boost. A breakdown below 112.50 may open a path for a further decline towards 108.00 and potentially lower. Lagging indicators such as the moving averages and MACD which point to the downside also marry this daily bearish view on the CHFJPY.
The EURNZD is turning bearish on the daily time with resistance found below the 20 and 50 SMA. As long as 1.6650 defends well, bears may be encouraged to send the EURZND towards 1.61 and potentially lower. A bullish move back above 1.6650 invalidates this daily bearish outlook.
WTI Oil edges towards $40
WTI bulls received ample encouragement during trading on Wednesday with prices surging towards $40 despite recent reports showing U.S crude stockpile hitting record highs for a further week. This unexpected market reaction reinforces how sensitive oil prices have become in an explosively volatile environment manufactured by expectations of production cuts. Regardless of recent gains, this commodity still remains bearish and the excessive oversupply in the heavily saturated markets should haunt investor attraction to oil. With expectations rapidly fading of any OPEC cuts until the US, Russia and Iraq reduce outputs; bears have been provided a foundation to send prices back down towards $35. From a technical standpoint, $40 is a critical level and bears need to defend this resistance for a chance to send WTI towards $35 and potentially lower.
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