NZD/USD Forex Signal - 31 January 2019

Yesterday’s signals would have produced a losing trade following the bearish rejection of the resistance level at 0.6910 if it had been taken.

Today’s NZD/USD Signals

Risk 0.75%.

Trades must be entered between 8am New York time and 5pm Tokyo time today only.

Short Trade

  • Short entry following bearish price action on the H1 time frame immediately upon the next touch of 0.6917.
  • 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

  • Long entry following bullish price action on the H1 time frame immediately upon the next touch of 0.6802.
  • 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 yesterday that the outlook looked very uncertain ahead of the FOMC release. Interestingly, although the NZD rose very strongly against the USD following the dovish impact of that release, the AUD is now rising more strongly and looking more resilient, so there seems to be some latent weakness in the NZD or at least a bearish effect from the resistance level above 0.6900 shown in the price chart below. The medium-term odds remain with the bulls, however, so long trades after bearish pullbacks could still be interesting. A break above 0.6920 would be a very bullish sign if it happens later today.

nzdusd

There is nothing of high importance due today regarding either the NZD or the USD.

Adam is a Forex trader who has worked within financial markets for over 12 years, including 6 years with Merrill Lynch. He is certified in Fund Management and Investment Management by the U.K. Chartered Institute for Securities & Investment. Learn more from Adam in his free lessons at FX Academy.