NZDUSD analysis: bearish but can’t break 0.6500 yet
Yesterday’s signals were not triggered, as the bullish price action took place just below the support level identified at 0.6497.
Today’s NZD/USD Signals
Risk 0.75%.
Trades may only be taken between 8am New York time Wednesday and 5pm Tokyo time Thursday.
Short Trades
Go short following bearish price action on the H1 time frame immediately upon the next touch of 0.6514 or the descending trend line shown in the price chart below which is currently sitting at about 0.6546.
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 Trade
Go long following bullish price action on the H1 time frame immediately upon the next touch of 0.6444.
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 NZD was now looking more bearish than the AUD and the price had already fallen to new 6-month lows. The only reason not to be bearish here was the proximity of 0.6500 just below the current price, which is an important round number and psychological level. I thought that the price may find support here. I was ready to take a bearish bias later if the price could trade below 0.6497 for a couple of hours consecutively.
This was a good call as the price failed to trade below 0.6497 significantly and has moved up since then over recent hours. However, it is the AUD that is more bullish, and which is dragging the NZD along with it, so the bullishness here looks fake and temporary to me. We can also draw a lower resistance level at 0.6514 where the price rejected last week’s low from below some hours ago – this is another bearish sign.
I would take a bearish bias if the price can trade below this week’s lows for a couple of hours consecutively yet. I am cautious as I think it could be worth standing aside while we wait for the FOMC release later, although there is a long-term bearish trend here which puts the odds overall in the bears favour.
There is nothing important due today concerning the NZD. Regarding the USD, there will be a release of the FOMC Meeting Minutes at 7pm London time.