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The Forex Pattern Price Time Report - NZD USD - Evening Session

By:   James Hyerczyk
  • 22-08-2008
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Profit-takers hit the NZD USD on Friday after a seven day rally.  Lower commodity prices gave weak longs an excuse to take profits.  
Despite the sell-off on Friday, this pair still closed higher for the week.  The charts indicate that a short-term range of .6823 to .7217 has been created.  
This range creates a retracement zone at .7020 to .6874.  This area has to be tested before one can call the market bearish again.  If buyers come in at this zone, then they may launch another leg up.

News that a Korean Bank is “considering” an investment in Lehman Brothers helped rally the Dollar on Friday.  The strong up move erased about half of the Dollar’s loss against a few of the majors, except for the British Pound which made a new low for the year on Friday.
 
The move to buy Lehman Brothers and the rally in the Dollar clearly identified the main cause of the Dollar’s recent weakness.  Since July 15 the market seems to have absorbed the problems at Fannie Mae and Freddie Mac as a government bailout has been accepted as the final solution.  Traders, however, did not know how to handle the Lehman situation.  Since the Fed has already indicated that Lehman was not a Bear Stearns, and not a takeover candidate, the break in the Dollar this weak was an indication that the market was gearing up for the worst - a failure at Lehman.

The news regarding a possible buyout of Lehman gave the Dollar a little breathing room, but the failure to close all of the Forex markets lower for the week, left open the possibility of another sell-off next week.  The key to next week’s direction is to watch Lehman Brothers, not Fannie Mae or Freddie Mac. In other news, Bernanke hurt the Dollar’s rise a little when he stated that he expected slower inflation and a more stable currency.  This statement led trader’s to believe that the Fed was in no hurry to raise interest rates.


PATTERN

Main Trend:  Down
Main Trend Top:  .7761 (07-15-08)
Main Trend Bottom:  .6823 (08-13-08)

PRICE

.7403          .618 Retracement
.7292          50% Retracement
.7181          Gann Angle Down

.7091          New York Close

.7019          50% Retracement
.6973          .618 Retracement
.6983          Gann Angle Up
.6888          Gann Angle Up
.6823          Main Trend Bottom (08-13-08)


TIME

Aug 15         90-Day Cycle
Aug 17        1-Year Anniversary


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Next Analysis: The Forex Pattern Price Time Report - USD CAD - Evening Session
Content Provided by:
James Hyerczyk

James A. Hyerczyk is a registered Commodity Trading Advisor with the National Futures Association.

Mr. Hyerczyk has been actively involved in the futures markets since 1982. He has worked in various capacities within the futures industry from technical analyst to commodity trading advisor.


DISCLAIMER:
Forex (off-exchange foreign currency futures and options or FX) trading involves substantial risk of loss and is not suitable for every investor. The value of currencies may fluctuate and investors may lose all or more than their original investments. Risks also include, but are not limited to, the potential for changing political and/or economic conditions that may substantially affect the price and/or liquidity of a currency. The impact of seasonal and geopolitical events is already factored into market prices. Prices in the underlying cash or physical markets do not necessarily move in tandem with futures and options prices. The leveraged nature of FX trading means that any market movement will have an equally proportional effect on your deposited funds and such may work against you as well as for you. In no event should the content of this correspondence be construed as an express or implied promise or guarantee from James A. Hyerczyk and J.A.H. Research and Trading or its subsidiaries and/or affiliates that you will profit or that losses can or will be limited in any manner whatsoever. Loss-limiting strategies such as stop loss orders may not be effective because market conditions may make it impossible to execute such orders. Likewise, strategies using combinations of positions such as "spread" or "straddle" trades may be just as risky as simple long and short positions. Past results are no indication of future performance. Information contained in this correspondence is intended for informational purposes only and was obtained from sources believed to be reliable. Information is in no way guaranteed. No guarantee of any kind is implied or possible where projections of future conditions are attempted.


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