NZDUSD: Double bearish price channel holding
Yesterday’s signals were not triggered, as none of the key levels have been reached yet.
Today’s NZD/USD Signals
Risk 0.75%.
Trades must be entered before 5pm Tokyo time Wednesday.
Short Trade Ideas
- Go short following bearish price action on the H1 time frame immediately upon the next touch of the bearish inner trend line currently sitting at about 0.6308 and shown in the price chart below or 0.6358.
- Place 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 Idea
- Go long following bullish price action on the H1 time frame immediately upon the next touch of 0.6250.
- Place 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 although we were getting a couple of bullish signs on the shorter-term time frames: a bullish over and under price pattern basing at about 0.6290, and a bullish break of an inner bearish trend line, nevertheless, I would still be looking for a short trade after a pullback to 0.6358 followed by a bearish reversal there.
This was a good call as the bulls were unable to achieve much with the price yesterday. The trend lines can be readjusted now and show a more clearly bearish picture with a wide bearish price channel holding which itself contains a narrower bearish price channel within its lower half.
I would take a bearish bias if we get a bearish reversal at either the inner channel’s upper trend line or 0.6358 which is now very confluent with the upper trend line of the wider price channel.
There is nothing of high importance due today concerning the NZD. Regarding the USD, there will be a release of ISM Manufacturing PMI data at 3pm London time.