NZD/USD Forex Signal: Some Life Left in Strong Bullish Move – DailyForex.com
Firm support is likely at 0.6935.
Today’s NZD/USD Signals
Risk 0.75% per trade.
Trades must be taken before 5pm Tokyo time Tuesday.
The NZD/USD currency pair has dominated recent Forex market action.
Last week saw a strong bullish rebound from a multi-month low price.
Volatility in this currency pair has been considerably higher over the last two weeks than any other, although AUD/USD is not far behind. The 15-day average true range (ATR) predicts a daily price fluctuation of almost 1%, which is quite high for the Forex asset class, suggesting NZD/USD is the subject of major speculation.
Institutional buy orders which can produce another significant bullish price move are most likely to be clustered at around 0.6935, but there may also be orders at 0.6983 and at 0.6900, with the latter looking more attractive as a potential buy.
Long Trade Signal
Conservative: long/buy limit order at 0.6935 with stop a few pips below 0.6900.
Aggressive: long/buy limit order at 0.6983 with stop a few pips below 0.6935.
Initial Take Profit Target: 0.7020 but traders will be well advised to watch for the presence of a price action reversal as the price approaches that level to determine whether to make a full or partial exit or hold on for additional potential gains.
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.
The big longer-term question concerning this currency pair is whether last week’s strong rebound could be the start of a long-term bullish trend, or whether it is just a short-term powerful snapback that will quickly exhaust itself before a resumption of the longer-term downwards movement begins again.
Shorter-term traders do not need to care much about the answer to this question.
Longer-term traders will probably be wise to wait for the price to clear significant resistance to judge whether the recent bullish momentum will be likely to be maintained. The major key level to watch for this should be 0.7105 or just the round number confluent there at 0.7100.
An interesting technical feature here is that the big round number at 0.7000 has been quite irrelevant to the price action, with the level not being respected at all during the several times it has been reached recently.
There is nothing of high importance scheduled today concerning the USD or the NZD.
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