NZDUSD analysis: Bearish retracement to 0.6700 area
Last Thursday’s signals were not triggered, as there was insufficiently bearish price action at 0.6700.
Today’s NZD/USD Signals
Risk 0.75%.
Trades must be entered from 8am New York time Monday until 5pm Tokyo time Tuesday.
Short Trades
Short entry following bearish price action on the H1 time frame immediately upon the next touch of 0.6730, or 0.6747.
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
Long entry following bullish price action on the H1 time frame immediately upon the next touch of 0.6692 or 0.6675.
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 last Thursday that I would take a cautious bullish bias today up to 0.6730 if the price could close above 0.6700 for two hours consecutively later. This was a good call as the price rose by about 28 pips after this scenario happened.
Although the USD has strengthened everywhere, the NZD is still quite strong, and we have not seen a break of the support level at 0.6692. I would be ready to take a bullish bias if we get a strong bullish bounce at either 0.6692 or 0.6675. However, if the price breaks strongly below 0.6675, it has a long way it could fall without meeting any support: all the way to the 0.6600 area. The fact that we have had so many consecutive up days has increased the chance of this strong breakdown scenario playing out.
There is nothing of high importance due today regarding the NZD. Concerning the USD, there will be a release of ISM Manufacturing PMI data at 3pm London time.