Yesterday’s signals produced a losing short trade following the bearish rejection of the resistance level at 0.6836.
Today’s NZD/USD Signals
Risk 0.75%
Trades may only be taken between 8am New York time and 5pm Tokyo time, during the next 24-hour period.
Long Trades
Go long following a bullish price action reversal on the H1 time frame immediately upon the next touch of the bullish trend line currently sitting at about 0.6800, or 0.6750.
Put the stop loss 1 pip below the local swing low.
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 ride.
Short Trades
Go short following some bearish price action on the H1 time frame immediately upon the next touch of 0.6865 or 0.6915.
Put 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 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
The price rose yesterday, invalidating the resistance level at 0.6835, but then failed at 0.6850 and has been moving bearishly in deep swings since then. It now looks as if the price will continue downwards over the short-term, in line with the long-term bearish trend. I have a bearish bias, but I do note reasons for caution: a bullish trend line below currently confluent with a round number at 0.6800, and a big psychological level below that at 0.6750. This means that the downwards movement is likely to be halted close to or below 0.6800, which may give an opportunity to get in on a major medium-term bullish reversal. I also note the major USD releases due later, which could push the price anywhere.
Regarding the USD, there will be releases of Core Durable Goods Orders and Unemployment Claims at 1:30pm London time, followed by Crude Oil Inventories at 5pm, and FOMC Meeting Minutes at 7pm. Concerning the NZD, there will be a release of Retail Sales data at 9:45pm.