NZD/USD Offers Possible Second Chance to Short
Direct from the desk of Dane Williams.
As a trader rather than an economist, it always makes me chuckle inside when a central bank such talks about negative rates and the currency rips higher. Something we've seen as NZD/USD continues to react to RBNZ chatter pertaining to the fact.
The last time we spoke about the Kiwi, I had price at higher time frame resistance. But with price chopping through it in both directions since, I've taken the liberty of moving it up to a zone where price has more recently found resistance.
Take a look at the NZD/USD daily chart below for the update.
NZD/USD Daily:
Contrary to popular belief, support/resistance is in no way a hard level or a true lie in the sand. All it shows us is an area on the chart where other traders are likely looking to do business.
As a result, support/resistance is a dynamic beast that you need to update on your charts from time to time in order to ensure you're watching the most recently relevant zones. You can see that I've updated the NZD/USD resistance zone on the daily here, simply because price has looked to be respecting that swing high more than the older, lower zone I had on my chart previously.
With what we know about the RBNZ driven fundamentals and with price still being capped by higher time frame resistance, we now zoom into an intraday chart to potentially look for a short entry. Here are two views of the same NZD/USD hourly at different zooms below.
NZD/USD Hourly:
NZD/USD Hourly Zoomed:
The first chart shows the first area of short term support that's now being retested as resistance (for a second time mind you), that we can use as a short entry point and manage our risk around. The second chart is simple a more zoomed in version so you can see the candlestick patterns more clearly.
Let's see how this one develops.
Best of probabilities to you,
Dane.
FOREX BROKR | Hive Blog Higher time frame market analysis.
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