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Important: This site uses New York Close Forex Charts so that each 24-hour session starts and ends at 5 pm EST. These charts are essential for trading price action.
On Tuesday we looked at a EURNZD terminal pattern.
The pair was in the process of testing channel support at 1.7060.
However, key resistance wasn’t far away at 1.7120. That was the level that buyers failed to hold as new support on the 24th.
As is often the case, that false break has attracted offers in the 1.7120 region.
You can see how EURNZD buyers have stumbled this week each time they’ve reached that 1.7120 area.
Today’s session managed a 1.7150 print, but as always, I don’t pay attention to the intraday price action.
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What matters most is where the pair closes at 5 pm EST.
At the time I’m writing this, it appears EURNZD will close well below 1.7120 and perhaps even carve a bearish pin bar into today’s close.
As for what could trigger a breakdown next week, there is a well-defined channel we can use for that.
If we use the two highs from April 17th and May 8th as a guide to plot an ascending channel, you can see how well support has held so far this week.
But that support level may not be able to hold much longer.
The price action here is heavy and is starting to weigh on that 1.7080 region.
If it fails, we could see EURNZD start to trend lower next week.
As for key support levels below 1.7080, I would keep a close eye on 1.6730 as well as the minor area at 1.6930.
This idea will remain in play as long as 1.7120 resistance holds on a daily closing basis.
I also have a short position here and plan on adding following a close below channel support. We’ve been discussing this idea at length in the member’s area.
Justin Bennett is an internationally recognized Forex trader with 10+ years of experience. He's been interviewed by Stocks & Commodities Magazine as a featured trader for the month and is mentioned weekly by Forex Factory next to publications from CNN and Bloomberg. Justin created Daily Price Action in 2014 and has since grown the monthly readership to over 100,000 Forex traders and has personally mentored more than 3,000 students.Read more...
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