NZD/USD Forex Signal - 8 May 2019

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Yesterday’s signals produced a long trade following the bullish bounce from the huge pin candlestick which rejected the support level at 0.6579. This could be a good long-term entry, but I think that in the short term we will see lower prices, so it may be wise to exit right away with the tiny amount of floating profit which is currently in the trade.

Today’s NZD/USD Signals

Risk 0.75%.

Trades must be taken between 8am New York time Wednesday and 5pm Tokyo time Thursday.

Short Trade

  • Go short following bearish price action on the H1 time frame immediately upon the next touch of 0.6636.
  • 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

  • Go long following bullish price action on the H1 time frame immediately upon the next touch of 0.6569.
  • 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.

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NZD/USD Analysis

I wrote yesterday that the price had continued to move in a relatively bearish way, with key resistance holding and the price remaining contained by the bearish trend line which had been in place over the medium-term. I thought that a breakdown below 0.6569 was likely to be especially significant if it happened.

We did get this bearish breakdown after the RBNZ made a surprise cut in its interest rate from 1.75% to 1.50%. This briefly sent the price down to reach a new 6-month low. However, the really interesting thing is that the price very quickly recovered within 2 hours to trade above its earlier price. This happened as a rejection of the support level at 0.6569. It is quite likely we will see lower prices over the short-term, but there is also a chance that we have put in a long-term low, so the price may slowly rise from here over the coming days and weeks – it may be good odds for a long-term buy.

It will be interesting how the price reacts over the coming days and that should tell us a lot about where the NZD is going.

nzdusd

There is nothing important due today concerning 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.