NZDUSD analysis: significant bottom at 0.6500?
Yesterday’s signals were not triggered, as the bullish price action took place below all the indicated support levels.
Today’s NZD/USD Signals
Risk 0.75%.
Trades must be entered between 8am New York time Thursday and 5pm Tokyo time Friday.
Short Trade
Short entry following bearish price action on the H1 time frame immediately upon the next touch of 0.6540.
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
Long entry following bullish price action on the H1 time frame immediately upon the next touch of 0.6508.
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 price was now approaching a key technical support level at 0.6514 as well as the huge round number / psychological level at 0.6500 which was confluent with the long-term broken bearish trend line.
Despite the long-term bearish trend and the short-term bearish momentum, a major bullish reversal in this area would not be a surprising development if it happened, so I would be prepared to take a bullish bias if we get a strong bullish bounce anywhere between 0.6514 and 0.6500 later today.
This was a good call as we did get a bottom / bullish turn in this area, and the short-term price action now is bullish, suggesting that the resistance level at 0.6526 will be broken very soon. That would be a bullish sign and a sustained break of 0.6540 would be an even more bullish sign.
This bottom at 0.6500, if it holds, could be a very significant first higher low in a major long-term bullish move from the recent multi-month low prices we have seen not long ago.
There is nothing important due today concerning the NZD. Regarding the USD, there will be a release of Preliminary GDP data at 1:30pm London time.