Yesterday’s signals were not triggered, as there was no bullish price action at either 0.6689 or 0.6635.
Today’s NZD/USD Signals
Risk 0.75%.
Trades must be entered from 8am New York time until 5pm Tokyo time today.
Short Trade
Short entry following bearish price action on the H1 time frame immediately upon the next touch of 0.6689.
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 run.
Long Trade
Go long following bullish price action on the H1 time frame immediately upon the next touch of 0.6579.
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 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 as the price had really just been consolidating quietly above 0.6889, it still looked possible that we would see a stronger bullish movement the longer this supportive area held. However, I thought that a bearish breakdown was more likely and would probably have more strength to it, so I was ready to take a bearish bias later if the price could break below 0.6689 and trade lower than that for a couple of hours. This was a great call, as the price fell by more than 100 pips after making that bearish break.
The price has recovered most of this earlier loss, and in fact has broken up above 0.6635 which seems to be acting as support now. This is a fairly bullish sign and this level is likely to be pivotal today. If it holds going into New York, we are more likely to see a further rise than a fall. If the level is muddied later, that will suggest we are going to have a messy consolidation between 0.6573 and 0.6689 for some time.
There is nothing of high importance due today concerning the NZD. Regarding the USD, there will be a release of ISM Manufacturing PMI data at 3pm London time.