NZDUSD: More Bearish
Yesterday’s signals were not triggered, as there was no bullish price action when 0.6349 was reached.
Today’s NZD/USD Signals
Risk 0.50%.
Trades may only be taken between 8am New York time Tuesday and 5pm Tokyo time Wednesday.
Short Trade Ideas
⦁ Go short following bearish price action on the H1 time frame immediately upon the next touch of 0.6349 or 0.6390.
⦁ 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 Idea
⦁ Go long following bullish price action on the H1 time frame immediately upon the next touch of 0.6315 or 0.6282.
⦁ 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 was short-term bullish momentum, but the price action here overall looked unpredictable. The best opportunities would probably be in playing the range from 0.6475 to 0.6315, but it seemed very unlikely that either price would be hit today. This was correct and my analysis overall was at least enough to stay out of trouble.
The price action over the last day has been bearish and so we have a more bearish technical picture now. I would be comfortable only taking short trades. We also have a weak but persisting long-term bearish trend, which gives more weight to the bearish picture.
For these reasons, plus the fact that the NZD is weaker than the AUD, I would be prepared to take a bearish bias if we get a bearish reversal at either of the nearest resistance levels detailed above today.
Note that there will be central bank input concerning the NZD later, so try to take the risk off any open trades before the releases.
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, Rate Statement, and Official Cash Rate at 1am London time, followed an hour later by the usual press conference.