With the RBNZ set to release their latest monetary policy statement soon, Kiwi charts are top priority for this week’s watchlist.
NZD/JPY: 4-Hour
With the Reserve Bank of New Zealand expected to acknowledge the downside risks of global growth while keeping their optimism, it makes sense to have a plan for both a bullish and bearish move in the Kiwi.
For traders who want to get setup for both ways, this consolidating pattern on NZD/JPY is one to watch as the market tightens up into a rising triangle pattern around the 76.50 handle. A break above that level would likely draw in more buyers who are playing the trend higher (and interest carry advantage), while a short break of the rising ‘highs’ could spark a big move from fresh sellers and traders looking to exit long positions.
EUR/NZD: 4-Hour
EUR/NZD could be a big mover this week, not only from the RBNZ event but also on a potential reaction to ECB President Mario Draghi giving a speech this Wednesday in Frankfurt, Germany.
On the four hour chart above, EUR/NZD has been consolidating into a descending triangle pattern with major support around 0.7060. If volatility picks up and you’re a bear on the pair, look for a confirmation momentum move lower because with the stocahstic showing potential oversold conditions, there just might be one more technical bounce ahead. Conversely, bulls could start taking a nibble here, but with the big central bank event coming up, it’s probably good idea to wait for a break of the falling ‘highs’ around the 1.6550 areabefore considering a long position.
AUD/CHF: 4-Hour
And last but not least, for those who aren’t interested in the RBNZ event, then we’ve got another descending triangle pattern on AUD/CHF that could already be breaking lower. With an absence of top tier events for both currencies, the technical traders could be in control of this pair all week, and a bounce from here to the broken support area around 0.7060 could draw in those technical players. With the general trend lower, this is a high probability setup, especially if global risk aversion sticks around to take interest away from high-yielders like the Aussie.
