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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 May 24th I wrote about an NZDUSD breakout.
The pair had been in a steady decline since the late March highs at 0.6940.
The market had also carved a well-defined descending channel.
It became pretty evident back on May 24th that a daily close above this pattern would attract an influx of buying pressure.
As you can see, NZDUSD put in a higher low last week at 0.6494.
That was the second sign that buyers were starting to form a base around the 0.6500 handle (the first being the May 24th breakout).
I know a few Daily Price Action members who secured entries last week, risking off the channel low at 0.6480.
That’s an 8R setup (using a 0.6720 target) all day long even if you mistimed the entry.
Another key level I wrote about on May 24th was 0.6590.
You can see how this level supported NZDUSD on January 3rd as well as the late April swing low.
Just yesterday I told members that 0.6590 is the new must-hold level for buyers.
So far, so good.
You can see where 0.6590 is now serving as new support for the pair.
It’s okay if NZDUSD dips below it intraday as it did earlier, but buyers need to see this level hold on the daily time frame.
This is why New York close (5 pm EST) charts are essential if you want to trade price action the way I do.
And as long as 0.6590 holds as new support, that 0.6720 area is exposed.
You can see where 0.6720 held as support between January and April. It’s also the 50% retracement of the year-to-date range.
The alternative would be a daily close back below 0.6590.
That would serve as a red flag for buyers and could potentially open the door to the recent highs at 0.6550.
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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