Bearish Targets ... Even Deeper Downside? | $NZD $CAD #RBNZ #BOC
Friends,
On a pure fundamental basis, a rate-based directional bias should favor a decline in the NZDCAD pair.
First, $NZD was recently affected by a decline in its dairy futures pricing, bringing the currency to a double-top formation near the 0.87525 level, and capping any new advance on the back on these futures price concerns.
Also, RBNZ stated:
"We saw nothing today to change our view that this tightening cycle has a long way to run before it’s all over and done", suggesting a low-likelihood of any added hike in its rate, especially following its 25% cash rate hike on June 11, 2014.
On the Loonie side, #BOC remains in a wait-and-see stance. Its initial consideration was to favor a decline in its rate. However, it also expressed concerns about any rate hike based on its export impact. In fact, consensus so far sees a "positive manufacturing trends and an improving U.S. economy" as a basis for an ulterior rate hike, but none have expressed a likelihood for this rate hike to occur in July 2014 - Rather, an increasing number of economist are suggesting that November would represent the earliest such hike, if at all.
PATTERN ANALYSIS:
On a pure pattern play, this category of trader might perceive the morphing of either Bullish Bat, whose Point-D would complete the pattern at 0.92020, although a more bearishly expectant trader might see a crab completing at a lower 0.89802 level.
PREDICTIVE/FORECASTING MODEL:
The model has produced a bearish market reversal confirmation signal, setting two bearish targets as follows:
1 - TG-1 = 0.92446 - 07 JUL 2014
and
2 - TG-2 = 0.91884 - 07 JUL 2014
These targets are colored to suggest that TG-1 (yellow) represents a moderate-probability target, whereas TG-2 (red) represents a lower-probability target. However, further downside is also probable, based on the recency of the reversal signal and the potential downside revealed by daily and weekly timeframes.
OVERALL:
Bearish outlook is based on the complicity of fundamental, pattern and predictive model data. An interim reaction to the upside remains a possibility as usual, but the technical data favors a downturn so far.
Cheers,
David Alcindor
Predictive & Forecasting Analysis
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Twitter: @4xForecasting
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On a pure fundamental basis, a rate-based directional bias should favor a decline in the NZDCAD pair.
First, $NZD was recently affected by a decline in its dairy futures pricing, bringing the currency to a double-top formation near the 0.87525 level, and capping any new advance on the back on these futures price concerns.
Also, RBNZ stated:
"We saw nothing today to change our view that this tightening cycle has a long way to run before it’s all over and done", suggesting a low-likelihood of any added hike in its rate, especially following its 25% cash rate hike on June 11, 2014.
On the Loonie side, #BOC remains in a wait-and-see stance. Its initial consideration was to favor a decline in its rate. However, it also expressed concerns about any rate hike based on its export impact. In fact, consensus so far sees a "positive manufacturing trends and an improving U.S. economy" as a basis for an ulterior rate hike, but none have expressed a likelihood for this rate hike to occur in July 2014 - Rather, an increasing number of economist are suggesting that November would represent the earliest such hike, if at all.
PATTERN ANALYSIS:
On a pure pattern play, this category of trader might perceive the morphing of either Bullish Bat, whose Point-D would complete the pattern at 0.92020, although a more bearishly expectant trader might see a crab completing at a lower 0.89802 level.
PREDICTIVE/FORECASTING MODEL:
The model has produced a bearish market reversal confirmation signal, setting two bearish targets as follows:
1 - TG-1 = 0.92446 - 07 JUL 2014
and
2 - TG-2 = 0.91884 - 07 JUL 2014
These targets are colored to suggest that TG-1 (yellow) represents a moderate-probability target, whereas TG-2 (red) represents a lower-probability target. However, further downside is also probable, based on the recency of the reversal signal and the potential downside revealed by daily and weekly timeframes.
OVERALL:
Bearish outlook is based on the complicity of fundamental, pattern and predictive model data. An interim reaction to the upside remains a possibility as usual, but the technical data favors a downturn so far.
Cheers,
David Alcindor
Predictive & Forecasting Analysis
------------------
Twitter: @4xForecasting
------------------