Daily Technical Update
May 19, 2010

NZD/USD: Slide Continues After Breakout


Weekly: Following up with yesterday’s NZD/USD update, the decline is accelerating after the breakout and a pullback.
The market is now reaching the lower bound of its a declining channel support, near the 38.2% retracement area. Do not expect support here to hold.
But if there is any bounce, anticipate a very minor one, and a continuation towards 0.6280 (50% retracement).
AUD/USD: Support Broken; Looking at Retracement Targets



Weekly: The Australian government’s tightening policies and China’s tightening policies as well are hurting the Aussie, and I suspect similar dynamics with the Kiwi.
The AUD/USD broke below a tripple top base and is about to test the SMA-200.
This is coincident with 38.2% retracement at the 0.82/0.83 area.
A break below this suggests further decline towards the 0.78 area, 50% retracement area.
A pullback could occur as the market tests 38.2% retracement and SMA 200.
This is not necessarily needed as a confirmation because the heaviness of these drops are overwhelming.
A pullback does offer the market a chance to breathe and may provide better reward to risk ratio for those with the bearish outlook.
Fan Yang
Currency Analyst
Commodity Trading Advisor

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