Yesterday’s signals may have provided a profitable short trade following the bearish break down of the outside candlestick rejecting the resistance level identified at 0.6915.
Today’s NZD/USD Signals
Risk 0.75%
Trades must be entered between 8am New York time and 5pm Tokyo time, over the next 24-hour period only.
Long Trade 1
Long entry following a bullish price action reversal on the H1 time frame immediately upon the next touch of 0.6806.
Place the stop loss 1 pip below the local swing low.
Adjust the stop loss to break even once the trade is 20 pips in profit.
Remove 50% of the position as profit when the trade is 20 pips in profit and leave the remainder of the position to run.
Short Trade 1
Short entry following some bearish price action on the H1 time frame immediately upon the next touch of 0.6865.
Place the stop loss 1 pip above the local swing high.
Adjust the stop loss to break even once the trade is 20 pips in profit.
Remove 50% of the position as profit when the trade is 20 pips in profit and leave the remainder of the position to run.
The best method to identify a classic “price action reversal” is for an hourly candle to close, such as a pin bar, a doji, an outside or even just an engulfing candle with a higher close. You can exploit these levels or zones by watching the price action that occurs at the given levels.
NZD/USD Analysis
I wrote yesterday that the most likely outlook was for a rise to 0.6915 where the price would then make a bearish turn. I thought it was important to be very cautious as such a turn would take several hours to play out. While it is true that the bearish turn did not happen right away, it happened more quickly than I predicted. The price then fell below the former support at 0.6865, which now looks to have flipped to become resistance. As we have a long-term bearish trend, this would seem to complete a very bearish picture, but the problem with this analysis is the obstacle in the shape of two confluent bullish trend lines which seem to be providing some support at 0.6850. I would be very careful taking a short off a bearish rejection of 0.6865. However, below 0.6840 the price would clear all obstacles and have the “blue sky” to make a stronger bearish movement lower, which could be interesting. I have a bearish bias again.
There is nothing important due today concerning the NZD. Regarding the USD, there will be a release of Unemployment Claims data at 1:30pm London time.