Yesterday’s signals were not triggered, as there was no bullish price action at 0.6655.
Today’s NZD/USD Signals
Risk 0.75%.
Trades must be taken from 8am New York time Wednesday until 5pm Tokyo time Thursday.
Short Trades
- Short entry following bearish price action on the H1 time frame immediately upon the next touch of 0.6658 or 0.6700.
- 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 ride.
Long Trades
- Long entry following bullish price action on the H1 time frame immediately upon the next touch of 0.6579 or 0.6569.
- 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 ride.
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 situation here was similar to that in the AUD/USD currency pair, except this pair is in a long-term bearish trend, so I had more faith in the move continuing. I thought that if the 0.6650 area broke down, the price would be quite likely to fall sharply all the way to 0.6579, so I was ready to take a bearish bias if the price could trade below that area on healthy volatility. This was a good call, as it did so, and fell to a new 3-month low price, and to lower prices still during the Asian session in line with the long-term bearish trend.
The bearish trend is supported by the market’s view of the central bank, the RBNZ, which is seen as increasingly likely to soften its monetary policy by cutting rates over the foreseeable future.
There is no reason not to be bearish, especially as we now have lower resistance at 0.6658.
There is nothing of high importance due today concerning either the NZD or the USD.