NZDUSD analysis: Bulls break long-term trend line
Last Thursday’s signals were not triggered as there was no bearish price action at either 0.6514 or the bearish descending trend line (still shown in the price chart below).
Today’s NZD/USD Signals
Risk 0.75%.
Trades may only be taken between 8am and 5pm Tokyo time Tuesday.
Short Trade
Go short following bearish price action on the H1 time frame immediately upon the next touch of 0.6592.
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 Trades
Go long following bullish price action on the H1 time frame immediately upon the next touch of 0.6546, 0.6526, or 0.6514.
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 every sign was bearish, the NZD was more bearish than the AUD, and the price seemed set to continue to make new long-term lows. I took a bearish bias on this currency pair.
This was a poor call, as just after I wrote that, the NZD took off against the USD, rising all the way to break the long-term descending trend line and continuing well beyond that. Such a strong bullish move from long-term lows suggests that the price may well have put in a long-term bottom just below the key psychological level of 0.6500.
At the time of writing, it looks as if the price is at a key pivotal point – it is just resting on resistance flipped to probable support at 0.6546. If this level holds over the coming hours, it would be a very bullish sign, and I would be prepared to take a bullish bias if there were a healthy upwards bounce here during the Asian session later. The price has room to rise all the way to at least 0.6580 where there was an inflection point a few days ago, visible in the price chart below.
Even if 0.6546 breaks down, I would still look to get long, either of the support levels below that would be attractive places to seek long entries following any bullish bounce, especially at the support level of 0.6526.
There is nothing of high importance due today concerning either the NZD or the USD. It is a public holiday today in the U.S.A.