Yesterday’s signals may have produced a long trade from the rejection of the support level at 0.6789, although the action was arguably not bullish enough. If this trade is held, it would probably be wise to close it or at least take off the risk as the short-term action looks quite bearish.
Today’s NZD/USD Signals
Risk 0.75%.
Trades may only be entered from 8am New York time Thursday until 5pm Tokyo time Friday.
Short Trades
Go short following bearish price action on the H1 time frame immediately upon the next touch of 0.6829, 0.6856, or 0.6867.
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 Trades
Go long following bullish price action on the H1 time frame immediately upon the next touch of 0.6789 or 0.6765.
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 the strong and fast drop seemed to be over and it was quite possible that the pair would make more gains over the next 24 hours and rise from these lows, but it was also quite possible that 0.6829 will hold as new support flipped to resistance. I would take a bearish bias if there were a strong bearish rejection there later today.
This was a good call. We have seen all key levels hold and although the price missed retracing to 0.6829 by just a single pip, it capped the bullish retracement and the price is now moving down from there. The problem for bears is that we have a couple of support levels below which may be too strong to break down immediately. However, the fact that the price has not recovered very strongly from yesterday’s fall suggests that the bearish move is not over yet – it just may take a while to play out.
I would take a bearish bias if the price can close below 0.6765 for a couple of consecutive hours later today. We have data coming later for both currencies so there could be some nice volatility to trade, especially during the Asian session.
Regarding the USD, there will be a release of Final GDP data at 12:30pm London time.
Concerning the NZD, there will be a speech by the Governor of the RBNZ at 8pm which might be watched more closely than usual after the BRNZ’s dovish turn earlier.