NZD/USD Forex Signal - 22 August 2019

NZDUSD: Bearish price channel

Yesterday’s signals were not triggered, as none of the key levels were yet reached.

Today’s NZD/USD Signals

Risk 0.75%.

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

Short Trade Ideas

  • Go short following bearish price action on the H1 time frame immediately upon the next touch of 0.6406 or 0.6452.
  • Place 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 Trade Idea

  • Go long following bullish price action on the H1 time frame immediately upon the next touch of 0.6347.
  • Place 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 NZD was very weak, so I would still be looking to take a bearish bias following a bearish reversal either at the upper channel trend line currently sitting at about 0.6418, or the horizontal resistance level at 0.6452 which was likely to be strong.

This was a good call as the price rejected the top of the price channel shown in the price chart below just at the New York open, from where it has fallen at an increased rate of bearish momentum.

There is no reason to be bullish as long as this bearish price channel holds.

The NZD remains more bearish than the AUD and is arguably the weakest major global currency, while the USD has maintained its relative strength regardless of the FOMC meeting minutes release yesterday.

For these reasons I would continue to look for short trades. The confluence of 0.6406, the round number at 0.6400, and the upper trend line of the price channel looks especially attractive as a location for a bearish reversal. I’d take a bearish bias there if that sets up later.

nzdusd

There is nothing of high importance due today concerning the USD. Regarding the NZD, there will be a release of Retail Sales data at 11:45pm London time.

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.