Last Thursday’s signals were not triggered as there was no bearish price action at 0.6658.
Today’s NZD/USD Signals
Risk 0.75%.
Trades must be taken from 8am New York time Monday until 5pm Tokyo time Tuesday.
Short Trade
- Go short following bearish price action on the H1 time frame immediately upon the next touch of 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 0.6629.
- 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 last Thursday that the price was seeming to flatten out at this little area of two key support levels starting at 0.6579, so we may be about to get a bullish retracement. I wanted also to see if the price broke below 0.6569 and could trade below that support for a couple of hours on healthy volatility – I was ready take a fresh bearish bias if that happened, but I saw a bullish retracement as likely to happen first.
This was a good call as my anticipation of a bullish retracement was correct, with new key support established at 0.6629. This is a bullish sign, as is the fact that the NZD is stronger and acting more bullish than the AUD. If the price makes no significant move down over the next day, that will strengthen the bullish base further.
I would take a bullish bias later if we get a healthy bullish bounce following a bearish retracement to the level at 0.6629, or to a level just a few pips above that – even though just a few days ago we were seeing new long-term low prices made.
There is nothing important due today concerning the USD. Regarding the NZD, there will be a release of ANZ Business Confidence data at 2am London time.