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

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.

The Weekly Closing Price Reversal at .6823 from the week-ending August 15th was confirmed last week.  

This market, however, ran into a down trending Weekly Gann Angle at .7175.  A breakout over this angle could launch a strong rally.  This Weekly Angle combines with a down trending Daily Angle to form a resistance cluster at .7175 to.7181.

Major support comes in at a Weekly Up Trending Gann Angle at .7053.  Weaknees could develop under this angle.

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
.7175          Weekly Gann Angle Down****

.7091             New York Close

.7053          Weekly Gann Angle Up****
.7019          50% Retracement
.6973          .618 Retracement
.6983          Gann Angle Up
.6888          Gann Angle Up
.6823          Main Trend Bottom (08-13-08)

TIME

None