NZDUSD: Minor bullish breakout in danger
Yesterday’s signals produced a losing short trade from the bearish inside candlestick rejection of the resistance level identified at 0.6430.
Today’s NZD/USD Signals
Risk 0.50%.
Trades may only be entered from 8am New York time Wednesday until 5pm Tokyo time Thursday.
Short Trade Ideas
⦁ Short entry following bearish price action on the H1 time frame immediately upon the next touch of 0.6433 or 0.6475.
⦁ Place the stop loss 1 pip above the local swing high.
⦁ Move the stop loss to break even once the trade is 20 pips in profit.
⦁ Take off 50% of the position as profit when the trade is 20 pips in profit and leave the remainder of the position to run.
Long Trade Idea
⦁ Long entry following bullish price action on the H1 time frame immediately upon the next touch of 0.6410 or 0.6344.
⦁ Place the stop loss 1 pip above the local swing high.
⦁ Move the stop loss to break even once the trade is 20 pips in profit.
⦁ Take off 50% of the position as profit when the trade is 20 pips in profit and leave the remainder of the position to run.
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 saw short trades from bearish reversals at either 0.6430 or 0.6475 as likely to be the best opportunities which could set up here in this pair. This was a good call if you were prepared to be flexible with the level, as the real bearish rejection happened just 3 pips above 0.6430.
Technically, we have a minor bullish breakout beyond the old bearish trend line, which is now supported by a horizontal level at 0.6410 which is supported by the broken trend line. I think the next movement will depend upon whether the price gets established back below 0.6410, in fact let’s say the round number at 0.6400 to be safe. The price would then have enough room to make a downwards move, so I would take a bearish bias if that scenario plays out soon after the New York open or, even better, soon after the Tokyo open which will follow the FOMC Meeting Minutes release.
There is nothing of high importance due today concerning the NZD. Regarding the USD, there will be a release of FOMC Meeting Minutes at 7pm London time.