While the 4 hour charts point lower, the dailies are still recovering, after having become oversold, so I would not be getting overly bearish down here as we could yet see some interim bounces, particularly if we get a cautious Janet Yellen on Wednesday. In the meantime, if we do head lower there will be minor support at 0.6545 ahead of the strong 0.6500/05 level. A break of 0.6500 though would be ominous, with only minor support at 0.6420 ahead of the next, stronger level at the base of the channel, currently at 0.6380, beyond which there is little to be seen until well over the horizon, at 0.6194 (July 2009 low). Maybe not over the horizon for long!
The topside will find sellers at 0.6580 (minor) and then at 0.6600 (100/200 HMAs). Beyond here may be tricky today, but further gains would head to 0.6660 where the top of the channel now lies, and then to the short squeeze high at 0.6694, but which I don’t think we are going to see again for quite a while.
Selling rallies remains the general theme.
Economic data highlights will include:
M: ANZ Business Confidence
T: NZ Trade Balance
W: NZ Building Permits
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