FOREX PRO WEEKLY, April 25-29, 2016

[Sive Morten]

Fundamentals
(Reuters) The U.S. dollar rose to its highest level against the yen in three weeks on Friday after a report said the Bank of Japan is considering expanding its negative rate policy to bank loans and could cut rates further.

The BOJ could consider the new step if policymakers decide to lower the negative 0.1 percent interest rate applied to some bank reserves parked with the central bank, Bloomberg reported.

The dollar rose more than 2 percent against the yen to 111.80 yen, its highest level against the Japanese currency since April 1. For the week, the dollar was set to rise 2.6 percent against the yen, which would mark its strongest weekly gain since late Oct. 2014.

If the BOJ were to apply its negative rate policy to bank loans, it would allow the central bank to cut its deposit rates deeper into negative territory without acting as a headwind for the nation's banks, said Omer Esiner, chief market analyst at Commonwealth Foreign Exchange Inc in Washington.

"It gives the Bank of Japan more room to cut rates deeper into negative territory, and that's what the yen is reacting to," Esiner said.

The BOJ's next two-day policy review ends on April 28. Esiner said that the dollar could hit 115 yen if greater stability in financial markets puts further pressure on the safe-haven currency.

The euro was last down 0.52 percent against the dollar at $1.1225 after hitting a more than three-week low of $1.1219 in the wake of a worse than expected German purchasing managers' index (PMI) survey. The euro was set for its second straight weekly drop against the dollar.

"The European economy is performing poorer," said Joseph Trevisani, chief market strategist at Worldwide Markets in Woodcliff Lake, New Jersey. "Negative rates are not working."

If euro zone data continues to be weak, it could lead the European Central Bank to ease further, said Kathy Lien, managing director at BK Asset Management in New York. She said that remained a possibility even though on Thursday ECB President Mario Draghi did not suggest an increase in stimulus measures any time soon.

The dollar hit a more than five-week high against the Swiss franc of 0.9796 franc. The U.S. dollar index, which measures the greenback against a basket of six major currencies, was last up 0.52 percent at 95.087 after hitting a more than one-week high of 95.196.

CFTC Report

Speculators turned negative on the U.S. dollar for the first time in nearly a year this week, with more investors in the global currency market taking short positions against the dollar than long positions, according to Reuters calculations and data from the Commodity Futures Trading Commission released on Friday.
The value of the dollar's position fell to -$1.85 billion in the week ended April 19, from $0.4 billion the previous week. It was the first time since May 6 that investors have been short the dollar on a net basis.

Today we will talk on JPY and here we have a special interest to COT report on JPY. IT shows two important moments and this is exceptional importance. First of all - net long speculative position has reached all-time highs. It means that there are no investors who could buy more Yen. It means that current bulltrend on JPY stands under impact of fast reversal and correction. It already has started on Friday as we've suggested.
Second important moment - take a look that Open Interest is not at top. It has dropped 2 times some weeks ago. On this drop net long position has contracted slightly. This drop suggests massive close of short position by hedgers and this is also very strong sign of trend reversal. Thus CFTC data tells us to not take any long positions on JPY right now as market needs relief and significantly overextended on JPY bullish positions.

Now some valuable insight on perspectives of BoJ policy from Fanthom Consulting:
Abenomics – A Busted Flush
by Fathom Consulting

With Abenomics now in its fourth year, Japan’s still faltering economy casts doubt on the efficacy of Mr Abe’s economic plan. And frustratingly for Mr Abe, this year’s spring wage negotiations appear to have fallen victim to the Bank of Japan’s latest foray into negative interest rates. Indeed, the Bank’s adoption of negative rates has done more harm than good, undermining both the Bank of Japan’s credibility and that of negative rates as part of the monetary policy toolkit. Together with increasing disquiet about the pace and the consequences of China’s slowdown, this proved a toxic combination in February — fuelling a leg down in global equities.

Concerned that overseas turmoil would knock business confidence and consumer sentiment at a “defining moment for Japan’s economy”, the Bank of Japan’s Policy Board decided to join the negative rates club at its Monetary Policy Meeting in January. But rather than calm financial markets, the Bank’s move has done more harm than good. Bank shares tumbled on the back of profit concerns and data suggest that consumer confidence has plummeted. The Bank’s policy also failed to stem safe haven flows into the Japanese Yen, which has strengthened 6% against a basket of currencies since January.

The Bank of Japan back-pedals

At last Tuesday’s Monetary Policy Meeting, the Bank of Japan left both the interest rate and its quantitative easing programme unchanged. This, together with a slightly more pessimistic tone in the Bank’s Monetary Policy Statement, saw equities slip while the yen continued to strengthen.

According to media reports, Bank of Japan Governor Kuroda remains upbeat about the Bank’s policy, arguing in a news conference last week that negative interest rates are having the intended effect. Other Board members are less convinced. Following a five-four split in January, two of the Policy Board’s nine members voted last Tuesday to change the interest rate structure so that it would be less punitive. Although outvoted, the Bank has amended its ‘key points’ document, emphasising its ability to adjust the proportion of banks’ deposits to which a negative rate will apply. It also excluded money reserve funds from the negative rate structure, while offering exemptions to banks that increase lending.

Unfortunately for this year’s spring wage negotiations, it is too little too late. Businesses sitting on vast cash piles, and enjoying record profits, have agreed base pay increases of around half the amount requested by labour unions, and significantly less than that negotiated in 2015. Toyota, for example, is reported to have granted a basic wage increase of ¥1500 a month, equivalent to just US$13.

Although concerns over overseas turmoil will have played a role in this year’s anaemic wage settlements, the confusion caused by the Bank’s unexpected move into negative interest rate territory is unlikely to have helped. Indeed, consumer confidence collapsed in February and businesses have had to grapple with a stronger yen regardless of the Bank’s policy. According to data from Japan’s Cabinet Office, inflation expectations have also weakened.

Although a relatively small proportion of Japan’s economy participates in the spring wage negotiations, the remuneration that unionised workers at large companies receive is likely to set the tone. And although Abenomics has succeeded in lifting corporate earnings and (recent gyrations aside) share prices, a missing ingredient remains wage inflation.

If the Abe Administration were able to achieve this, it would help enormously in combatting the economic malaise that has dogged the country for much of the past two decades. Unfortunately, the Bank of Japan’s latest foray into negative interest rates has done little to help on that front. And with the majority of Board members still upbeat about the Bank’s policy manoeuver, a further cut cannot be ruled out. Minutes of the Bank of Japan’s meeting in January, released last Friday, revealed that members had also debated expanding the Bank’s asset purchase programme.

In summary, breaking Japan’s deflationary mind-set remains the Bank’s greatest challenge. But having failed to achieve that through monetary policy alone, and with Abe’s third arrow struggling to make a mark, perhaps the time has come for Japan’s policymakers to consider some form of redistributive fiscal policy — transferring funds from cash-rich corporations to Japan’s household sector. Indeed, Japanese corporates are sitting on a cash pile amounting to around 50% of GDP, far higher than in the EA, US and UK.

Technicals
Monthly

So, monthly DRPO "Sell" is done. Last week market also has reached weekly targets around 108. As you can see drop was really fast. Action of such large scale could happen only with support global geopolitical or economical factors and demand huge funds flow, as we've discussed. At the same time it means that big flows of this kind couldn't just finish in a blink of an eye - suddenly and usually they have a tendency to be continued with medium-term or even long-term period.

Fortunately or unfortunately but right now, guys, we can't just be focused on pure technical, market mechanics picture. We have to take in consideration major political events, since they will impact on market sentiment and right now Yen mostly is driven by sentiment. At the same time technical analysis has a feature to coincide or even predict some shifts in global events sometimes. We've seen this many times, when we do not know what event will happen but foresee market reaction on this.

Months ago we said that "it is small probability for downward continuation right now. Market stands at upper border of very strong support area. This area includes monthly oversold and K-support around 107-108 area. Although trend is bearish, but market could pass this level as it does not exist only if WW III will start."
Actually we have here DiNapoli bullish "Stretch" pattern. If even we do not have any intention to trade it - we should pay attention to it and do not try to go against it.

At the same time we have to acknowledge that Yen has dropped below YPS1 and this points on existing of new long-term bear trend on this currency pair. Consequently we treat any upside action in short-term perspective only as a bounce, but not as reversal. For reversal it needs to move above previous highs on monthly chart. Besides, market has shown outstanding drop in February, that has become most significant one for long period.
Fundamental issues also are mixed. Although BoJ takes strong dovish steps, but they are not very effective and as Fanthom Consulting suggests, further rate drop in negative territory will not lead Japanese economy to stable growth and healthy inflation. But currently analysts poll mostly suggests precisely the same measures from BoJ on coming meeting.

That's being said, monthly analysis leads us to conclusion that chances on upside retracement are extremely high. It's already has started. Many issues support this bounce - as technical as fundamental, including CFTC data.

Weekly

Market is showing fist strong reaction on touching strong monthly K-support area and Agreement - as Yen also has completed AB-CD 1.618 target. If we're talking on weekly chart solely, here we have DiNapoli "Kibby trade" directional pattern. It has the same idea as "Stretch". The only difference is Stretch appears on combination of Fib level and OB/OS, while Kibby trade suggests Fib extension and OB/OS combination.
How to trade this pattern? First we need to get confirmation by close price (already done). Second step is to drop time frame for 1 step (to daily) and wait for retracement to nearest Fib support level. Finally, after position will be taken - use nearest Fib extension as target of this trade.
As you can see this setup takes the shape of huge morning star pattern. That's being said, those who are searching for taking short-term long position and trade this retracement up could use this setup. While long-term traders who wants to trade JPY short should wait when this upside respect and bounce will finish.

Daily

So, here market has completed our kind of DRPO "Buy" LAL pattern. Yen has reached it's minimum target and even exceeded it. Trend is bullish here. As we've said, DRPO could become just a beginning, the pattern that will trigger upside action. But overall upside action has nice chances to be significantly higher, since we have a reaction on monthly time scale.

Still, if even rally will last more, it will not be absolutely smooth. As market will touch overbought, it should take pause. Thus, first moment of this kind has come. As you can see JPY has reached Fib resistance and overbought level. Again, we have DiNapoli bearish "Stretch" pattern. It seems that Stretch pattern is favorite one for JPY in recent times. This pattern has two major meanings. First one - it could be useful for scalp traders who would like to take short position on intraday charts. Second - this pattern should lead to retracement down and it in turn could give entry opportunity for those who would like to join the rally.

4-hour

As some profit taking could happen at the eve of BoJ meeting, may be Yen will show some pullback. From this standpoint 110.20 K-support level seems interesting. Also it coincides with WPP. For scalp traders who will take short position by daily Stretch pattern - this level could be used as possible target.

Conclusion
We have bearish view on USD/JPY (bullish on JPY) in long-term perspective. As techincal as fundamental factors show possible further Yen appreciation. The core of our long-term view is investors' disappointment in BoJ efforts to make Yen weaker. This is important also because BoJ has applied all major tools to weaken the Yen. But based on recent reaction this still is not very successful. Additional pressure on Yen comes from geopolitical global situation that makes any BoJ efforts phantom.
At the same time currently market needs to get a relief. Different factors as technical as fundamental, CFTC data point on upside bounce with high probability.
Currently JPY has a lot of setups on different time scale in different directions and every trader could find something that matches to his own taste.

The technical portion of Sive's analysis owes a great deal to Joe DiNapoli's methods, and uses a number of Joe's proprietary indicators. Please note that Sive's analysis is his own view of the market and is not endorsed by Joe DiNapoli or any related companies.

 

[Sive Morten]

Good morning,

(Reuters) The U.S. dollar slipped against the yen on Monday as traders took profits from the greenback's recent rally against the Japanese currency, while the dollar weakened against other major currencies on expectations for a dovish Federal Reserve meeting.

The dollar hit a session low of 110.85 yen after reaching a more than three-week high of 111.90 yen . Analysts said traders were taking profits and selling the dollar despite expectations that the Bank of Japan could increase its stimulus measures on Thursday after a policy meeting.

While the BOJ could increase stimulus, analysts said skepticism that such an increase could weaken the yen lifted the Japanese currency against the dollar, while the prospect of a Fed that would be in no rush to raise interest rates also weighed on the greenback.

"There are a huge amount of doubters that the BOJ could do anything policy-wise that would reflate the economy, and that the Fed would actually act any time soon," said Boris Schlossberg, managing director at BK Asset Management in New York.

While the dollar hit 111.90 yen early on Monday, the majority of the greenback's recent climb against the yen came on Friday, when the dollar rallied more than 2 percent against the yen. That rally was triggered by a Bloomberg report that the BOJ is considering applying negative rates to its lending program for financial institutions.

Despite recent gains, the dollar was last down 7.6 percent against the yen for the year, building on a 6.4 percent loss against the yen in the first quarter, which was the biggest quarterly decline since the third quarter of 2009.

The euro rebounded against the dollar, hitting a session high of $1.1277 after hitting a nearly four-week low of $1.1213 earlier on Monday. Analysts said expectations that the Fed would not suggest another interest rate hike soon in a policy statement on Wednesday hurt the dollar against the euro.

"There will be little guidance, and it all points to the Fed taking a more patient stance until the U.S. economy forces a rate hike," said Alfonso Esparza, senior currency strategist at Oanda in Toronto, in reference to the central bank's path of raising interest rates further.

Today guys, it makes sense to take a look either on JPY or GBP. But since we've talked on JPY just recently, and it has started retrcement down - we will take a look at GBP.

Last time we've aknowledged changing of our short-term view on GBP and said that it has turned to bullish, although long-term berish view still stands intact. Right now GBP has completed first important task - breakout through neckline on daily chart. Trend is bullish. Here we have some sequence of tragets. First one stands around MPR1 and 1.27 Butterfly around 1.46, while next one is AB=CD and 1.618 butterfly extension 1.47-1.4750:

Meantime on 4-hour chart market has reached resistance - it has completed inner butterfly "Sell" and meets WPR1. Thus, may be minor retracement will follow. Level around necklne, WPP and Fib support cluster looks attractive for long entry.
If not, then probably GBP will continue action right to 1.46 target. Minor retracement could give an opportunity to go long, until market stands on a way up to 1.47 target:

 

[Sive Morten]

Good morning,

(Reuters) The dollar remained subdued on Wednesday after a broad retreat overnight ahead of policy decisions by both the Federal Reserve and Bank of Japan, while the Australian dollar tumbled after data showed core inflation unexpectedly slowed to the lowest on record.

The Fed is considered certain to keep rates steady when its policy meeting ends later in the global day, so the focus rests on the tone of its statement and any clues it offers as to when interest rates will rise.

Traders said policymakers may be wary of sending too strong a message of an imminent policy tightening, particularly after another batch of disappointing data.

"I think the Federal Reserve is getting nervous about tightening," Byron Wien, vice chairman of Blackstone Advisory Partners, part of investment and advisory firm Blackstone Group LP, told reporters at a roundtable event on a visit to Tokyo.

"They tightened in December, and said they would tighten four times in 2016. They passed on a March increase, and I think they'll only raise interest rates once, probably in June," he said.

Any hints that an interest rate hike might be delayed would leave the dollar vulnerable to more weakness against the euro and yen. While dollar bulls fear the Fed will sound dovish again, a rise in U.S. Treasury yields to five-week highs suggested some investors expected a more hawkish tone.

Hours after the Fed, the BOJ will step up to the plate on Thursday in Asia.

Many market players expect the BOJ to take some form of easing measures, including an increase in purchase of stocks and a cut in interest rates, though many say this meeting will be a close call.

The Australian dollar, meanwhile, skidded 1.5 percent to $0.7632, plumbing $0.7623 earlier, after data showed Australia's consumer prices unexpectedly fell 0.2 percent in January-March, undershooting median forecast of a 0.3 percent rise, while core inflation was slower than expected.

It was the first time since 2009 the inflation gauge fell to a negative level, raising speculation that the Reserve Bank of Australia may have to consider rate cuts.

"The underlying rate of inflation has slowed considerably and Australia's CPI rates are finally starting to look more like its developed market peers. This won't sway the RBA to lower the cash rate next Tuesday, but it will keep their easing bias in play for a while," said Jasmin Argyrou, Aberdeen Asset Management senior investment manager in Sydney.

The Aussie had risen almost 15 percent earlier this month from its near seven-year low touched in January, thanks to recovery in commodity prices, but rising expectations of a rate cut could halt the rally.

"The RBA has been nervous about a strength in the Australian dollar. So a rate cut would be a natural option. The Aussie's rally could reverse its course," said Yukio Ishizuki, forex strategist at Daiwa Securities.

"On the other hand, iron ore prices have surged this year, so given their correlation, that should prevent the Aussie from falling fast," he added.

Today guys, we will take a look at EUR. Not because it forms clear patterns or signals for trading, but because its behavior looks important for us. Indeed, if we could correctly understand it's behavior we could understand its sentiment and what market expects from Fed meeting.

On daily chart we have some really special thing. Take a look at our major AB-CD pattern. We should follow it step by step to clearly understand the market mechanics. After AB=CD target has been completed, EUR has shown very deep retracement - right to major 5/8. Actually this was a red line for either continue this AB-CD or destroy all bullish setup. But EUR has turned up and exceeded former top and AB=CD target. It means that now it stands in expansion mode. At the same time it has not hit yet next 1.618 target. Hence there should not be any deep retracement. Right now we're coming to most important moment.
On last upside action market has exceeded former top, but was not able to continue move right to 1.16 target. We could clarify this as failure, but we have some special issue that does let us to do it. Market shows just minor bounce, no reversal has followed. This is normal bullish behavior that tells - market is building an energy, accumulating power for next attempt of breakout. Actually, EUR is coiling around former top. Thus overall picture on daily chart looks bullish and mostly points on dovish expectations from the Fed. Alhough this absolutely does not mean that they will be dovish in reality.

On 4-hour chart we could use some patterns that could clarify the moment when EUR will start next upside attack on 1.1460 area. On 1st picture you see that price returns back above MPP, WPP and already has tested WPR1. Retracement down was very small and stopped at K-support area. Action above WPR1 will be first sign of rally attempt:

Another pattern on 4-hour chart - this channel, or flag. It's upside breakout also will become a sign of starting challenge daily resistance. If it will be successful, it's target stands at 1.16 area:

Thus, as you can see, even if you do not have bright patterns, digging of price behavior could clarify something...

 

[Sive Morten]

Good morning,

(Reuters) The yen jumped against the dollar and euro on Thursday after the Bank of Japan held monetary policy steady, quashing speculation that it would ramp up its already extensive easing program.

The BOJ stood pat even as global headwinds, a strong yen and soft consumption threatened to derail a fragile economic recovery.

The dollar was down nearly 2 percent at 109.33 yen. The greenback had neared 112 yen at the start of the week after a media report saying the BOJ was considering applying negative rates to its lending facilities for banks.

"It was inevitable that the yen regained all the losses made on easing expectations. Sure, the market was disappointed, but that does not mean the yen will keep gaining," said Koji Fukaya, president of FPG Securities in Tokyo.

"The preconditions that could have prompted the BOJ to try and arrest the yen's appreciation have shifted," he said. "In January and February, we had China worries and sliding oil boosting the yen, but the situation has changed."

Concerns over China's economy have eased somewhat while crude oil prices have rebounded sharply from 13-year lows, in theory lessening demand for the safe-haven yen.

After a two-day policy meeting that ended Wednesday, the Federal Reserve said global economic headwinds remained on its radar. But unlike last month, it stopped short of mentioning the risks these posed.

Offering little hope of a move in June, the Fed said U.S. "economic conditions will evolve in a manner that will warrant only gradual increases in the federal funds rate."

It went on to say the fed funds rate "is likely to remain, for some time, below levels that are expected to prevail in the longer run."

Elias Haddad, Commonwealth Bank of Australia currency strategist, said the Fed statement was less cautious than in March, but the FOMC appeared in no hurry to lift interest rates again soon.

Weighed down by the yen's surge against the greenback, the dollar index .DXY slid to a one-week low of 94.020.

The euro climbed as far as $1.1363 overnight after the Fed stuck to its script of a gradual hike in rates, but later stepped back to $1.1329.

Elsewhere, New Zealand's central bank skipped a chance to cut its interest rates on Thursday, triggering a short squeeze that saw the kiwi dollar gain a full U.S. cent.

The kiwi soared towards $0.6950, from around $0.6850, after the RBNZ kept the cash rate steady at 2.25 percent. It was on track for a 1 percent rise this week. RBNZ retained an easing bias and tried to talk down the currency, but to no avail.

The Australian dollar, in contrast, wobbled against the greenback after posting its biggest one-day slide in eight months on Wednesday after weak domestic inflation data revived prospects of an interest rate cut there. The Aussie was last at $0.7601, well below the recent high of $0.7836.

Today we have wide choice of currencies for discussion. All our former setups are showing nice progress - GBP, NZD. But still we will take a look at EUR today, and on some othe currency tomorrow...
On daily picture of EUR situation has not changed significantly. EUR probably has become a currency that has shown least reaction on Fed statement. Yesterday we've talked a lot on our view on EUR and why w think that short-term sentiment here is bullish. Thus, nothing has changed here or even has improved as EUR has moved slightly higher:

We're mostly interested in situation on 4-hour chart. Here we've pointed on two major events that could work as confirmation potential upside breakout. First is - market should move above WPR1. This is almost done, at least right now price stands above it but hasn't closed yet there:

Second - market should break up this channel. It will be great, if simultaneously it will form upside reversal swing here.
For our assistance I've marked very useful high wave pattern. Traders very often ignore it, and mostly like reversal patterns as engulfings, stars, hammers etc... But HW sometimes has greater value. The major advantage of HW - it could confirm you the breakout. Thus, if price breaks the top of HW - it means that upside action should continue. So, here, beyond the channel, we also will keep an eye on HW pattern.
May be EUR finally will step on the road to 1.16:

 

[Sive Morten]

Good morning,

(Reuters) The U.S. dollar and euro were on track to post their biggest daily losses against the yen in more than five years on Thursday in the wake of the Bank of Japan's surprise decision not to further ease monetary policy.

The BOJ decided to hold monetary policy steady on Thursday in the face of soft global demand and a sharp rise in the yen, defying expectations for increased stimulus measures to fight deflation.

"You had a market that was very short yen, and they walked into today destroyed," said Richard Scalone, co-head of foreign exchange at TJM Brokerage in Chicago. He said traders were still looking to exit "short" bets against the yen, a scenario he said could lead the dollar to fall below 107 yen over the next week.

The dollar pared losses against the yen on stronger-than expected U.S. first-quarter consumer spending and core inflation, but later retraced losses.

"Unfortunately, the U.S. data was overshadowed by what happened in Japan," Scalone said.

The dollar was also hit by the Federal Reserve's decision on Wednesday not to give a strong sign of another rise in rates in June.

"The fact that the Fed was dovish and the BOJ did not deliver was certainly the hard combination that drove dollar/yen lower," said Sebastien Galy, currency strategist at Deutsche Bank in New York.

The U.S. dollar index, which measures the greenback against a basket of six major currencies, was last down 0.67 percent at 93.752 . The euro was last up 0.27 percent against the dollar at $1.1350, near a one-week high of $1.1368 touched earlier.

In addition to the BOJ, New Zealand's central bank skipped a chance to cut its interest rates on Thursday, triggering a short squeeze that saw the kiwi dollar soar more than 2.3 percent to an eight-day high of $0.6990.

So, GDP data yesterday also has mild impact on market, but as it was mostly supportive to our expectations as GDP was 0.5% vs 0.9% expected.

Thus, EUR confirms breakout and shows upside tendency, as well as GBP is approaching to major destination point. Today we will take a look at NZD, since it stands very close to important moment.
Because on NZD overall setup is yet to be formed, while on EUR and GBP it is formed and developing...
Actually we already have talked about it on 21st of April. Our NZD setup mostly stands on weekly chart. The point is 0.71 area is very strong resistance that includes AB=CD target, OB level and Fib level. So, chances on downward bounce at least for 30% is very high. And this is ~300 pips.

But right now we have one problem. On daily chart market shows behavior that is more typical for reversal rather than for upside continuaiton. Reason for that is minor AB=CD weekly target. If you will plot AB=CD not from absolute low but from the low where upward action indeed has started - you'll see that AB=CD target already has been hit. This is the major confusing moment right now here.
So we need to get an answer on question - should we wait for 0.71 or we should start prepare for short entry.
Daily picture also brings very contradictive answers. As you can see retracement after 1.27 target of butterfly seems too deep that could be treated as reversal and possible starting of H&S pattern. But from another point of view - market stands in channel and has shown harmonic retracement down.

Currently market stands at very important moment. This is top of left shoulder of possible H&S pattern, but also this is WPR1 and minor 0.618 AB-CD target. At the same time we should undertsand the stage of current price motion. This is expansion stage after contraction. It means that if market really has intention to reach 0.71 - it should not show deep retracement here, only minor one is possible (and another butterfly "Sell" by the way). Because major retracement already has happened.
IF, instead NZD will drop to the potential neckline - this will become very strong sign and could lead to real reversal. This action will be unnatural for current stage of market behavior.
IT means that we will get the answer by monitoring of current retracement on NZD: