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NZDUSD buyers were determined to close the pair above 0.6700 this week.
As a result, the pair has carved a bullish pin bar on the weekly time frame. This will likely trigger a move higher next week.
Not only has 0.6700 been a key factor for NZDUSD since July of last year, but it’s also the 50% retracement of the recent move higher that began in October 2018.
It’s no surprise then that buyers were eager to hold the line at 0.6700.
This week’s pin bar is also a bullish engulfing range. It’s largely a result of last week’s small holiday range, but it is another bullish factor nonetheless.
As for key resistance levels, first up is 0.6920.
The area could be as high as 0.6970. However, the weekly time frame does show how the 0.6920 level has been influential since May of last year.
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Even though 0.6920/70 may cause some issues for buyers, I don’t expect it to be the final destination for NZDUSD.
For that, I think we have to look higher toward 0.7170. The area served as key support in February and March of last year.
It would also equal a 580 pip move from this week’s low which is nearly identical to the recent 550 pip rally between October and December 2018.
That leaves traders with more than 400 pips to work with.
Alternatively, a weekly close below 0.6700 or a move below this week’s low of 0.6588 would negate the bullish outlook.
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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