Last Thursday’s signals were not triggered as none of the key levels were ever reached.

Today’s NZD/USD Signals

Risk 0.75%.

Trades must be entered from 8am New York time Monday until 5pm Tokyo time Tuesday.

Short Trade

  • Short entry following bearish price action on the H1 time frame immediately upon the next touch of 0.6853.

  • 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 Trades

  • Long entry following bullish price action on the H1 time frame immediately upon the next touch of 0.6789 or 0.6785.

  • 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 last Thursday that the picture had become somewhat more bearish as support had been invalidated but it may be that the big psychological level at 0.6750 plus the trend line currently confluent with it would hold the price up. I saw overall an even balance and wanted to avoid trading this pair.

The picture has become much more bullish over recent days, with the NZD doing much better than the AUD which is in itself a bullish sign for the NZD. We have also seen a clear break above the long-term bearish trend line shown in the price chart below, and stairstep higher support levels, the highest of which is now above that bearish trend line. Finally, although there is a recent double top inflection at about 0.6825, there are no key resistance levels for more than 50 pips above the current price. These are all bullish signs, but overall this pair is not bullish enough to be traded long with strong confidence, so I would step back and watch and wait for the time being.

NZDUSD

There is nothing of high importance due today concerning the NZD. Regarding the USD, there will be a release of Retail Sales data at 1:30pm London time followed at 1:00am by a minor speech from the Chair of the Federal Reserve.

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