NZDUSD analysis: Key test ahead at 0.6512 / 0.6500
Yesterday’s signals were not triggered, as there was insufficiently bullish price action at 0.6541 or 0.6526.
Today’s NZD/USD Signals
Risk 0.75%.
Trades may only be entered prior to 5pm Tokyo time Thursday.
Short Trade
Go short following bearish price action on the H1 time frame immediately upon the next touch of 0.6526 or 0.6540.
Put 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 Trades
Long entry following bullish price action on the H1 time frame immediately upon the next touch of 0.6541, 0.6526, or 0.6514.
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 yesterday that the fact that the price was holding up at 0.6541 was a bullish sign, plus the fact that the price had plenty of room to rise as there was no key resistance until 0.6529, were bullish signs. As it turned out, after several hours of sitting heavily on that support at 0.6541 and eating away at it, the price fell strongly as the Asian session ended and the London session got underway. The key driver was poor ANZ Business Confidence Survey results.
The price is now approaching a key technical support level at 0.6514 as well as the huge round number / psychological level at 0.6500 which is currently confluent with the long-term broken bearish trend line.
Despite the long-term bearish trend and the short-term bearish momentum, a major bullish reversal in this area would not be a surprising development if it happens, so I would be prepared to take a bullish bias if we get a strong bullish bounce anywhere between 0.6514 and 0.6500 later today.
There is nothing of high importance due today concerning either the USD or the NZD.