NZD/USD Forex Signal - 3 May 2018

Yesterday’s signals may have been triggered, as a bullish inside candlestick rejected the support level at 0.6993 but hit a new low a few pips below that price and below the previous swing high.

Today’s NZD/USD Signals

Risk 0.50%.

Trades must be taken between 8am New York time and 5pm Tokyo time, over the next 24-hour period only.

Short Trade

  • Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of 0.7106.

  • Place 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 run.

Long Trade

  • Long entry following some bullish price action on the H1 time frame immediately upon the next touch of 0.6993.

  • Place the stop loss 1 pip below the local swing low.

  • 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 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 if the price does return to 0.6993, we could still see a double bottom there, so I would not rule out a re-entry there. This is the kind of trade that could give a reward to risk ratio of ten or twenty to one. This is the scenario which has played out. The price is now struggling to rise above new lower resistance at 0.7031. The long trade from the 0.7000 area is a long shot, but it has the potential to go far over the medium to long term. We may well not see prices below that low for several weeks or months, but I have no definite directional bias on this pair over the short term.

NZDUSD

There is nothing due today concerning the NZD. Regarding the USD, there will be a release of ISM Non-Manufacturing PMI data at 3pm London time.

Adam Lemon

Adam Lemon began his role at DailyForex in 2013 when he was brought in as an in-house Chief Analyst. Adam trades Forex, stocks and other instruments in his own account. Adam believes that it is very possible for retail traders/investors to secure a positive return over time provided they limit their risks, follow trends, and persevere through short-term losing streaks – provided only reputable brokerages are used. He has previously worked within financial markets over a 12-year period, including 6 years with Merrill Lynch.