NZDUSD: Bearish price channel holds
Last Thursday’s signals were not triggered, as none of the key levels given were reached that day.
Today’s NZD/USD Signals
Risk 0.75%.
Trades may only be entered from 8am New York time Monday until 5pm Tokyo time Tuesday.
Short Trade Ideas
- Short entry following bearish price action on the H1 time frame immediately upon the next touch of 0.6406 or 0.6452.
- 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 Trade Idea
- Long entry following bullish price action on the H1 time frame immediately upon the next touch of 0.6347.
- 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.
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 there was no reason to be bullish as long as this bearish price channel held. I also noted that the NZD remained more bearish than the AUD. For these reasons I wanted to continue to look for short trades. I was particularly hopeful for the level at 0.6406.
This did not set up over the following day, but it was a good call, as the price has continued to move lower after rejecting the resistance at 0.6406. The bearish price channel continues to hold, as can be seen within the price chart below.
There is not really any change yet to the bearish technical picture – it is notable that despite the risk recovery over the past few hours, the NZD remains relatively bearish and unresponsive to that. However, there is a key support level at 0.6347 which has held, and which may now begin to work to break up the bearish flow.
I continue to look for short trades and the level at 0.6406 again looks very attractive as it is highly confluent with the upper trend line of the bearish price channel. This could well be today’s pivotal point. If the price can get established above it, we could get a surprisingly strong and sharp bullish movement.
I will take a bearish bias if there is a firm bearish reversal later at 0.6406.
There is nothing of high importance due today concerning the NZD. Regarding the USD, there will be a release of Core Durable Goods Orders at 1:30pm London time.