Commerzbank's analysis suggests a brighter outlook for the New Zealand Dollar (NZD) in the coming months despite recent downward pressure. Factors like broader U.S. Dollar strength and domestic issues have kept the NZD below last year's highs. However, robust labor markets in both New Zealand and Australia and an expected...
Is Dollar's Struggle Over?
2022-12-19 • Updated
The US Dollar has been remarkably sluggish for the past few weeks despite being within a distinct Demand zone. My expectation of a springing rebound off the demand zone has not exactly played out yet, however, the zone remains unbroken. This means I can still uphold my bias for as long as the demand zone remains intact.
GBPUSD is still cycling around the rally-base-drop supply zone. My expectation is that price pushes down at least to the 1.20200 area - the final target being the marked line at 1.17458. It is also crucial to note that the marked supply zone doubles also as a PIVOT zone (or flip zone).
The marked zone between 1.06378 and 1.05732 constitutes the preferred point of entry. There is a visible PIVOT zone that also overlaps with the rally-base-drop supply zone from the first BoS (Break of Structure). As a result, we can expect price to drop from the area of entry with profit targets at; 1.04055, 1.03250, and finally 1.00835.
USDCAD is trading inside a descending channel on the Daily timeframe. The Fibonacci retracement level can also be seen aligning perfectly with the rally-base-drop supply zone which intersects with the trendline resistance of the descending channel. These confirmations indicate a high chance of a bearish rejection from the marked zone with targets at; 1.33650, 1.32500, and 1.30900
Personally, I expect to see USDJPY make a run for the highlighted zone around the 142 price area, however, the journey may not begin as plainly as it ought. Price could initially stagger back toward the demand zone before finally yielding the bull run.
The arrow indicates my bias and expectation based on the daily timeframe price reaction from the demand zone. The major target is 0.96460.
NZDUSD has reached a flip zone and is expected to dip lower toward the 100-Day Moving Average. It should also be noted that the marked supply zone is right within the vicinity of the 200-Day Moving Average.
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