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NZDUSD is approaching a significant support area at 0.6700.
It’s the same level that triggered the weekly bullish pin bar I discussed on the 4th of January.
Given the 200 pip rally that ensued, the bullish signal worked out well.
However, last week’s 150 pip decline erased most of those gains. It also places NZDUSD just 40 pips above the 0.6700 level to start the new week.
One thing that’s interesting about the price action since December is the lower high that the pair carved last month.
The fact that NZDUSD failed to reach 0.6970 in January could suggest weakness.
It’s going to take a daily close below the confluence of support at 0.6700 to confirm the breakdown.
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If it occurs, we could see NZDUSD trend lower toward 0.6590. A close below that would open the door to 0.6440.
Of course, bullish price action from the 0.6700 area would delay the move lower.
For now, this is one for the watch list and nothing more. But given the potential that could follow a break below 0.6700, it’s one worth watching.
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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