NZDUSD: Strong bullish rejection of 0.6590
Yesterday’s signals were not triggered, as there was no bearish price action at either 0.6615 or 0.6630.
Today’s NZD/USD Signals
Risk 0.75%.
Trades may only be entered prior to 5pm Tokyo time Friday.
Short Trade Ideas
Go short following bearish price action on the H1 time frame immediately upon the next touch of 0.6694 or 0.6730.
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 Ideas
Go long following bullish price action on the H1 time frame immediately upon the next touch of 0.6656, 0.6632, or 0.6615.
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 we had a sharp rejection of the support level below 0.6600 at 0.6590, and there were signs that the recent movement down has now reached a major bottom, although it was probably too early to go long. The situation would probably become clearer after the FOMC minutes release due later. The first bullish confirmation sign will be a sustained break above the resistance level at 0.6615.
This was a good call and the bullish action heralded the start of a stronger bullish movement which was boosted by the more dovish FOMC approach we saw yesterday. This is a bullish sign. The problem now is that there is more major U.S. data coming soon which could push the price anywhere. If this data produces a surprise which weakens the U.S. Dollar further, we would be likely to see another firm push up in this currency pair.
There is nothing of high importance due today regarding the NZD. Concerning the USD, there will be a release of CPI (Inflation) data at 1:30pm London time today, followed by testimony from the Chair of the Federal Reserve before the Senate at 3pm.