Last Thursday’s signals were not triggered, as none of the key levels were yet reached.
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 0.6636.
- 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
- Go long 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 last Thursday that the picture had become a little more bearish as the former support near 0.6636 seemed to have slipped to become new lower resistance. I was ready to take a bullish bias in the unlikely event that the price fell to 0.6579 and made a strong bullish bounce there. Over the day, the price just went sideways within a narrow range under the resistance at 0.6636, so nothing important happened.
The picture is more bearish still today, with the risk-off sentiment causing a gap down in price, although the Australian Dollar is weaker than the New Zealand Dollar. There is a medium-term bearish trend line which is slowly becoming confluent with the resistance at 0.6636. On the bullish side, there could be a long-term double bottom at 0.6579.
At present, it is hard to see whether the bulls or bears will prevail, but we will soon get to a point where there has to be either a major bearish breakdown below 0.6569 or a bullish break above the trend line shown in the chart below.
There is nothing important due today concerning the USD. Regarding the NZD, there will be a release of Inflation Expectations data at 4am London time.