NZD/USD Forex Signal - 20 May 2019

NZDUSD analysis: still bearish below 0.6546

Last Thursday’s signals were not triggered as neither of the key levels were ever reached.

Today’s NZD/USD Signals

Risk 0.75%.

Trades may only be entered between 8am New York time Thursday until 5pm Tokyo time Friday.

Short Trades

  • Short entry following bearish price action on the H1 time frame immediately upon the next touch of 0.6546 or the descending trend line shown in the price chart below which is currently sitting at about 0.6565.

  • Place 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 run.

Long Trade

  • Go long immediately upon the next touch of 0.6497.

  • Place 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 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 last Thursday that I would remain long-term bearish below 0.6592, but if the price could now get established above the round number at 0.6600 this would be a bullish sign. Alternatively, I was ready to take a bearish bias if there had been a strong enough bearish rejection of the 0.6592 resistance level later after New York opens. Neither of these scenarios played out.

This pair opened with a gap up and a boost due to the effect of the surprise Australian election result, which boosted the Australian Dollar which has in turn boosted the New Zealand Dollar. However, the price has been unable to get above the resistance level at 0.6546 yet, and the long-term wide bearish price channel remains intact. Technically, we do not yet have any reasons to take a bullish bias, but the picture would look more bullish if the price can get established above 0.6546, which may happen. I would take a bearish bias later if the price keeps failing to rise higher at 0.6546 and then makes a firm bearish move from that level after New York opens. A short trade from a bearish turn at the upper trend line also looks like an attractive possibility.NZDUSDThere is nothing important due today concerning either the NZD or the USD.

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.