NZDUSD: Will psychological level at 0.6500 hold?
Last Thursday’s signals were not triggered, as none of the key levels were reached that day.
Today’s NZD/USD Signals
Risk 0.50%.
Trades may only be entered between 8am New York time Monday and 5pm Tokyo time Tuesday.
Short Trade Ideas
Go short following bearish price action on the H1 time frame immediately upon the next touch of 0.6590 or 0.6619.
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 0.6500 or 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 last Thursday that I would be prepared to either short a bearish rejection of 0.6590 or long a bullish rejection of 0.6515, especially if the same rejection also touched 0.6500. This was a reasonably good call although not very useful. However, we now see the price respecting these levels if we reduce the support from 0.6515 to the round number at 0.6500.
There are two reasons why despite the bearish trend I do not want to take any opportunity to get short here: firstly, because the AUD is more bearish than the NZD; secondly, because the price is so close not only to the big round number and psychological level of 0.6500 but also a multi-year low price at 0.6444.
There may be an opportunity to get long if we see a long-term bullish reversal here at either 0.6500 or 0.6444. It’s a long shot, but the expectancy could be very profitable as a “long tail” trade.
Regarding the USD, there will be a release of ISM Non-Manufacturing PMI data at 3pm London time. Concerning the NZD, there will be releases of Employment Change and Unemployment Rate data at 11:45pm.