The EUR/JPY pair’s rate on daily timeframe has fixed below Fibonacci correction level of 38.2% and slightly slowed down the descending movement. The bearish absorption points at a possible further decline of quotes. But the pattern is followed by the bearish Doji Star that indicates the possible growth. That is why considering the candlestick patterns analysis the situation is quite controversial. The pair is most likely to go down towards Fibonacci correction level 50.0% - 104.24. Considering this controversial situation, let us have a look at the smaller chart.
On the smaller chart we can see the restructured Fibonacci grids indicating the descending trend. The “bearish absorption” points at continuation of downside mood of the EUR/JPY pair. The breakdown of Fibonacci correction level 76.4% is to confirm this assumption so the rate will probably move towards the correction level of 100.0% - 104.62. That is why holding the position below the correction level 76.4% is crucial.
On Thursday the NZD/USD pair has failed to change drastically the current dynamics. The rate still remains near Fibonacci correction level of 61.8% and it is hard to say whether the quotes will be fixed below this level or not. In case they do, the rate will be able to decline further and reach Fibonacci correction level 76.4% - 0.7700. If the pair fails to overcome this barrier, the reversal is likely to take place resulting in the growth of the pair towards Fibonacci level of 50.0% – 0.7967.
On 4H timeframe we can also observe the rate near Fibonacci correction level of 261.8%. The rate has recently fixed above this level though the bearish Harami pattern points at the contrary fixation below this level. Therefore, the key level on the daily timeframe is Fibonacci level of 61.8%. The situation on the 4H timeframe points assumes the high possibility of further descending movement of the quotes.
As it was expected, yesterday the EUR/JPY pair has managed to elaborate the Fibonacci correction level of 61.8%. Moreover, the quotes were fixed below this level though this fact cannot be considered as a convincing. Therefore, if this fixation is stronger, quotes are expected to drop further towards correction level of 76.4% - 100.42. In case this fixation is false, especially if a bearish formation is formed near this level, the rate will be able to restore slightly towards the Fibonacci level of 50.0% - 104.22. The bearish formation Harami points at the downside movement. There were no patterns that may influence the pair’s movement.
4h
On the 4H timeframe the situation is the same. The rate has dropped a bit lower than the Fibonacci correction level of 161.8%. In case the rate declines further, the fixation will be considered as more convincing. As a result. The forecast for both timeframes will coincide and the pair will try to go down to the level of figure 100 (100.42 – 76.4% of Fibonacci on the daily timeframe).
In general during the last days the pair remained on the same place. A lot of new different candlestick patterns were formed. Nevertheless, yesterday the bearish Absorption pattern was formed forecasting the further decline of quotes.
As it was expected, despite the fixation below the Fibonacci correction level of 100.0%, the pair has failed to continue the uptrend and reversed to the benefit of the euro. The fixation below the level of 100.0% though, is of positive character as it enables the quotes to decline further when the rate bounces to the upside. The ascending movement of quotes can reach the correction level 76.4% - 100.44. This level will be decisive for the pair. In case this level is passed through, the quotes are likely to fall further. The current bullish formation Harami clearly points at reversal movement to the upwards. If the rate is fixed below the correction level of 100.0%, the way to the further decline will open.
The smaller chart also depicts the clear reversal of quotes to the upwards. The Bullish Absorption pointed at possible upside movement of quotes followed by the fixation of rates below the Fibonacci correction level 323.6%. Therefore, in coming days the growth of the pair may target the correction level of 261.8% - 99.20. As it is on the bigger timeframe, the pair is likely to reverse to the benefit of the yen, especially if there is a bullish candlestick formation. The quotes are expected to decrease towards Fibonacci level of 423.6% - 93.77.
For the second time the kiwi has dropped against the greenback reaching the Fibonacci correction level 100.0%. Considering the reversal movement of quotes to the upside, this level has not been broken through for the second time. Therefore, for the second consecutive week quotes are likely to rise from correction level of 100.0% towards the correction level 76.4% - 0.7700. There were no bullish formations. When the Fibonacci correction level 76.4% is reached (if this happens), the quotes will go back to the 0.7460 level. In case the level 0.7700 fails to prevent the growth of quotes, the upward movement can continue towards the next correction level.
4h
On the daily chart we can clearly see both bounces from the Fibonacci level of 523.6% which almost perfectly coincides with Fibonacci correction level of 100.0%. After the second bounce the pair has turned towards the kiwi reaching the Fibonacci level of 423.6% - 0.7612. Nevertheless, for the last three days it has failed to elaborate it and lost some Tuesday’s gains. On the other hand, the formation of Bullish Absorption looks positive for the further growth of quotes and reaching of the 0.7612. Considering the double bounce from the 523.6%, the 423.6% level could be broken by the quotes and let the pair go higher. In this case, the rate will probably ascend towards 323.6% - 0.7760 level.
As it was expected, after the double bounce of quotes from the Fibonacci correction level of 100.0% the kiwi edged against the greenback, reaching the level 76.4% - 0.7700. Presently quotes are for the third time expected to reverse further to the downside towards the Fibonacci correction level of 100.0%. Otherwise, if the rate is fixed above the correction level 76.4%, the quotes are likely to reach the next correction level of 61.8% - 0.7847. The bearish candlestick formation near the 76.4% will indicate the most probable reversal to the downside
4h
New Fibonacci grid shows that in the course of Wednesday’s trades quotes were fixed above the Fibonacci correction level of 23.6% - 0.7638. Though this fact enables the outlook for the possible growth, the Fibonacci level 76.4% acts as a barrier on the daily chart. As long as the rate fails to fix above this level, it is hard to forecast the further ascending movement. But in case it holds on the 4H timeframe, the quotes are likely to reach the level of 0.7750 – 61.8%. Considering the analysis of the candlestick patterns we can see that the growth of quotes is most likely to take place. On the other hand, the bearish formation can confirm the worries of the bounce from the Fibonacci level of 76.4% on the daily chart.
NZD fixed above the correction level 61.8% - 0.8080 of Fibonacci against the USD. However, it formed a bearish Shooting Star candlestick which resulted in the quotes downward move and fall towards 61.8%. If the currency holds below this level, the decrease may extend towards the following level of correction 50.0% - 0.7961. But in case the trend will rebound from 61.8%, the initial growth towards 76.4% - 0.8229 correction may be restored. Bullish candlestick formation may contribute to the quotes rebound, especially near 61.8% correction level.
4h
4 hour time frame indicates the quotes growth but with frequent falls against this acceleration which are easily forecasted by candlestick formations though. On the whole, the trading dynamics was lost during the last week. At the moment we can observe bullish Moring Star candlestick. However, the situation did not change after its formation due to soft trading. Today we can count for the new upward jump towards 100.0% - 0.8232 of Fibonacci. But bullish formation may be ahead of it in case it is formed. If we see a bearish formation, the pair may increase its chances of quotes rebound to the good of the dollar and start its downward move towards 76.4% - 0.8048 of Fibonacci.
NZD/USD Candlestick Analysis for September 3, 2012
Daily
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After NZD reached Fibonacci level of 50.0% against USD, the quotes demonstrated a reverse to the good of the kiwi dollar and grew significantly on Friday. As the result, we can regard this move as quotes’ rebound from correctional level of 50.0%, although any bullish candlestick formation was formed. Now we can expect the quotes growth towards Fibonacci level of 61.8% - 0.8081. However, the rebound from that level is also possible and if it happens, the pair may hit again 50.0% - 0.7963 Fibonacci. In case NZD/USD fixes above the correctional level of 61.8%, the pair will get a great opportunity to reach further 76.4% -0.8228 Fibonacci.
4h
The same situation can be observed on 4-hour time frame. There is no any bullish candlestick formation, however, the pair demonstrated a swing (which was hard to foresee) and reached the correctional level of 76.4% - 0.8048 Fibonacci. Having returned to that level, the pair formed the bearish candlestick formation Top of Forceps. Taking this into account, we can suggest that the quotes may demonstrate a reverse near this level on Monday and resume their fall toward the correctional level of 61.8% - 0.7935. Until the pair is below the level of 76.4%, such outcome is most probable. In case the pair fixes above the correctional level of 76.4%, the pair will get a chance to continue its growth towards the correctional level of 100.0% - 0.8232.
