NZDUSD: Consolidation continues to hold
Yesterday’s signals were not triggered, as none of the key levels were reached during yesterday’s session.
Today’s NZD/USD Signals
Risk 0.75%.
Trades must be taken before 5pm Tokyo time Friday.
Short Trade Ideas
Short entry following bearish price action on the H1 time frame immediately upon the next touch of 0.6452, 0.6475, or 0.6500.
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 Ideas
Long entry following bullish price action on the H1 time frame immediately upon the next touch of 0.6406 or 0.6365.
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 I would still be prepared to take a long trade from 0.6406, but the highly correlated AUD/USD currency pair was even more bullish than this one, so it might be better to look for long trades there given the very significant basing we are seeing now off a former significant resistance level at 0.6850. I also thought that bulls should watch out for more failures close to 0.6452 which was starting to look more likely to hold.
This was a good call overall, as the price has moved up over the past day, but the resistance at 0.6452 is also holding so far.
I think there is a small edge in favour of bulls, but the U.S. inflation data due later will probably cause a breakout from this consolidation range which has contained the price for a while. I would prefer to take a long trade in AUD/USD and a short trade in this currency pair, if either scenario sets up. I have no directional bias here beyond that.
Regarding the USD, there will be a release of CPI (inflation) data at 1:30pm London time. There is nothing of high importance due today concerning the NZD.