Good Day,

Some movement yesterday and overnight for me with NZD and CNY news.

I was surprised by the response the markets had to Janet Yellen's testimony yesterday, quite frankly, when I heard on CNBC that traders may have found her explanations on when rate increases may occur confusing, I thought that this was a sad indictment of U.S. education. For me, I thought it was clear and unambiguous. It would appear that the U.S. equity traders would like the FED to say that on a specific date at a specific time they will no matter what raise rates by how much!! This is very concerning. and something to keep in mind.

<span style="text-decoration: underline;"><strong>EUR/USD:</strong></span>

The big news yesterday was the EUR/USD finally broke below 1.3575 that had held us up for a couple of weeks or so. We are now on our way to 1.3500. If this level gives way, we are probably on a move much lower as this level breaking would be very bearish event.

If you are not yet short, if we get a pullback to 1.3575 this would be a great entry level in my opinion. We may never get there but that is the area to short at should we bounce.

On the EUR/USD Daily chart below here are the points that I have been building for the past two / three days:
<ol>
	<li>Fibonacci 2012 lows to 2014 highs 1.2046 to 1.3998.</li>
	<li>1.3537 (23.6%) retracement is where we sit right now.</li>
	<li>1.3500-10 is great horizontal support.</li>
	<li>I have a flag pattern drawn for a day or so, with a measured move lower to 1.3256, which coincides with the 38% retracement.</li>
	<li>If we break below 1.3500 I would see a larger move than to the 38% retracement.</li>
	<li>50% retracement is 1.3022</li>
	<li>My favoured retracement is the 61.8% level, which is 1.2792.</li>
</ol>
I am currently short as follows: -

FT160
Short at 1.3570.
Limit 1.3210....this I will review and extend.
Stop Loss 1.3650.

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<a href="https://weeklyfxdrivethru.com/wp-content/uploads/2014/07/EURUSD-DAILY-16072014.png"><img class="aligncenter size-large wp-image-4092" src="https://weeklyfxdrivethru.com/wp-content/uploads/2014/07/EURUSD-DAILY-16072014-1024x504.png" alt="EURUSD DAILY 16072014" width="1024" height="504" /></a>

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I have been waiting as you know for this trade for weeks. This trade actually prompted my blog title last weekend "PATIENT TRADERS ARE REWARDED FOR WAITING".

My fundamental views will be technically lined up on the break below 1.3500.

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<span style="text-decoration: underline;"><strong>NZD/USD:</strong></span>

Finally....finally...finally we get a break lower.

Fundamental factors on my mind are: -
<ol>
	<li>Milk prices and Dairy product prices in general are falling.</li>
	<li>China Growth (GDP) last night was pretty much in line last night at 7.5%...but remember three / four years ago China GDP at this level would have been viewed at the world's end.</li>
	<li>New Zealand largest trading partner is China. In line or not GDP has been marked down over and over again.</li>
	<li>RBNZ governor Wheeler rate hike next week?</li>
</ol>
In my opinion, I do not think we can get carried away with being over exposed short this pair yet. But if there is no rate hike next week and articles I have read are pointing this way we could see an accelerated fall in the NZD/USD, with knock-on effects through the cross-currencies.

If you are not yet short a think that a pullback to 0.8750 may be a great place to enter short.

On the chart below I have merely highlighted the longer-term trend lines and the key Fibonacci levels.

There is potential for a larger move lower,  but I think we need to see the RBNZ meeting next week out of the way.

I will be adding to the Daily chart below over the next few days and update with my thoughts as they develop.

<a href="https://weeklyfxdrivethru.com/wp-content/uploads/2014/07/NZDUSD-DAILY-16072014.png"><img class="aligncenter size-large wp-image-4087" src="https://weeklyfxdrivethru.com/wp-content/uploads/2014/07/NZDUSD-DAILY-16072014-1024x504.png" alt="NZDUSD DAILY 16072014" width="1024" height="504" /></a>

I am looking at trades involving the USD/CAD, but want to see today's BOC rate decision / statement and Press Conference over first.

There are several other trades on my RADAR and I will tweet these if they develop.

Take care today and do not get suckered into establishing large positions....being nimble is the approach and only add when trades are established.

Scott