NZDUSD: More Bullish after RBNZ maintains rate
Yesterday’s signals were not triggered, as there was no bearish price action when 0.6349 was reached.
Today’s NZD/USD Signals
Risk 0.50%.
Trades must be entered from 8am New York time Wednesday until 5pm Tokyo time Thursday.
Short Trade Ideas
⦁ Short entry following bearish price action on the H1 time frame immediately upon the next touch of 0.6430 or 0.6475.
⦁ 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 Idea
⦁ Long entry following bullish price action on the H1 time frame immediately upon the next touch of 0.6390, 0.6344, or 0.6315.
⦁ 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 was looking to take short trades from rejections of any of the resistance levels. I also suggested that getting square before the big RBNZ release would be a good idea. I was correct in taking a bearish bias until the RBNZ release as the price continued to move down slowly, although no key resistance level was hit so no trade.
The RBNZ release produced a hawkish surprise, as the RBNZ had been widely expected to announce a rate cut, but passed on the cut instead, leaving its Official Rate at 1.00%. This central bank input pushed the price up strongly by approximately 1%. The price is still holding up above the new higher support level at 0.6390 and the longer it holds, the more likely a continuation of the upwards move is to happen.
Despite these bullish developments, and the medium to long-term bullish trend, this area between about 0.6450 and 0.6500 has been a key pivotal zone, so bulls might push the price up there, but it will just be ripe for another bearish reversal. Of course, this means that a short trade following a decisive bearish turn there could be very rewarding, so it is something to wait and watch out for as a set up.
Concerning the USD, there will be a release of CPI (inflation) data at 1:30pm London time, followed by testimony by the Chair of the Federal Reserve before Congress at 4pm.
Regarding the NZD, the Governor of the RBNZ will be testifying before Parliament at 7:10pm.