NZDUSD: Bearish move may complete soon
Yesterday’s signals were not triggered, as there was no bullish price action at 0.6365 when that level was reached.
Today’s NZD/USD Signals
Risk 0.75%.
Trades must be taken from 8am New York time Tuesday until 5pm Tokyo time Wednesday.
Short Trade Ideas
Go short following bearish price action on the H1 time frame immediately upon the next touch of 0.6347 or 0.6365.
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 0.6317 or 0.6250.
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 I thought there were several technical bearish signs. I thought that 0.6365 was very likely to be hit over the day and could provide an interesting short trade opportunity if it breaks down, though probably after a retest from below rather than on a breakout.
I was mostly correct, with the price easily breaking below 0.6365 and continuing its fall, so this was a good call.
Both the AUD and the NZD are bearish while the USD is being bought now, and these are also bearish signs. However, technically, there are signs that this latest downwards thrust is almost complete, so I think a day or so of consolidation is a likely scenario now as we are almost at the support level of 0.6317. If that level breaks down, the road to what is likely to be strong support at 0.6250 becomes wide open.
I would avoid trading this currency pair today unless there is a firm bearish break below 0.6300 which would lead me to take a bearish bias. This might happen, as the RBA has released minutes which contain more dovish material on a potential rate cut, which will tend to drive down both the AUD and the NZD.
There is nothing of high importance due today concerning either the NZD or USD.