Last Thursday’s signals were not triggered, as unfortunately the level at 0.7248 was only hit after the specified period, but it acted as resistance very effectively.
Today’s NZD/USD Signals
Risk 0.50%
Trades may only be taken from 8am New York time to 5pm Tokyo time, during the next 24-hour period.
Short Trade
Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of 0.7248.
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.
Long Trade
Go long following some bullish price action on the H1 time frame immediately upon the next touch of 0.7187.
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.
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 the most likely short-term move now looked like a bullish pull-back. I was more comfortable entering a short trade than a long trade in this currency pair. I also noted that the resistance level at 0.7248 looked attractive as it was confluent with a key psychological level at 0.7250. The forecast worked out well, the price initially rose then turned around at 0.7248, although it has not yet fallen by a large amount from there.
I have no directional bias today. Although the technical picture is unchanged, the price seems to be holding up and another test of 0.7248 looks likely. If the price falls again from there it could be a good entry. If instead the price gets established above 0.7250, that would be a bullish sign.
There is nothing due today concerning the NZD. Regarding the USD, there will be a release of ISM Manufacturing PMI data at 3pm London time.