Last Thursday’s signals produced a profitable short trade from the bearish rejection of the resistance level identified at 0.6888, but it only made barely the minimum 20 pips of profit.
Today’s NZD/USD Signals
Risk 0.75%.
Trades must be taken between 8am New York time and 5pm Tokyo time, during the next 24-hour period only.
Short Trade
Go short following bearish price action on the H1 time frame immediately upon the next touch of 0.6899.
Put 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.
Long Trade
Go long following bullish price action on the H1 time frame immediately upon the next touch of 0.6698.
Put 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.
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 last Thursday that we were currently seeing sentiment against the Australian Dollar which is always sensitive to risk-off sentiment, which is helping to weaken the New Zealand Dollar. So, although the bearish movement may have been running out of momentum, I was be prepared to take a bearish bias if we see a retracement to the 0.6888 level following by a failure and a fresh bearish push. This was a pretty good call, as the price rejected that level and continued to trade lower. The price is still rejecting that level, but it has been touched a few times and is starting to look weaker now. A sustained break above 0.6900 will be a relatively bullish sign, but I think that this pair is best avoided by traders today and I take no directional bias.
There is nothing important due today concerning either the NZD or the USD.