NZDUSD: Psychological level at 0.6500 continues to hold
Yesterday’s signals produced a short trade from the bearish rejection of the resistance level I had identified at 0.6590. It is in a floating profit and should be closed right away.
Today’s NZD/USD Signals
Risk 0.50%.
Trades must be taken from 8am New York time Tuesday to 5pm Tokyo time Wednesday.
Short Trade Ideas
Go short following bearish price action on the H1 time frame immediately upon the next touch of 0.6590 or 0.6619.
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 Trade Ideas
Go long following bullish price action on the H1 time frame immediately upon the next touch of 0.6500 or 0.6444.
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.
NZD/USD Analysis
I wrote yesterday that there were two reasons why despite the bearish trend I did not want to take any opportunity to get short here: firstly, because the AUD was more bearish than the NZD; secondly, because the price was so close not only to the big round number and psychological level of 0.6500 but also a multi-year low price at 0.6444. I thought also that there may have been a good long trade entry opportunity.
This was a pretty good call as the price has risen over the past day by more than it has fallen, although it is being held by the range from 0.6500 to 0.6590 almost to the pip, so my nearby key levels have worked very well.
It is difficult to say what is most likely to happen here next, particularly as we have the major monthly central bank input on the Kiwi coming later today which could cause a lot of volatility and push the price anywhere. The best opportunity here is likely to be fading a reversal after any spike to a key level soon after the RBNZ releases during the Asian session.
There is nothing of high importance due today concerning the USD. Regarding the NZD, there will be releases of the RBNZ’s Monetary Policy Statement, Official Cash Rate, and Rate Statement at 3am London time, followed by the usual press conference an hour later.