NZDUSD Breaks Trend Line Support, Targets 0.7175

by Justin Bennett  · 

February 27, 2018

by Justin Bennett  · 

February 27, 2018

by Justin Bennett  · 

February 27, 2018

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Over the weekend I pointed out a trend line that had developed on the NZDUSD. The level that extends from the December 8, 2017 low served as support between Friday and Monday before breaking down earlier today.

The breakdown wasn’t a surprise given how price action had started to lean on the trend line over the last 48 hours of trade. Moreover, Monday’s rally failed to close above the 0.7315 resistance level that I highlighted in the weekly forecast.

Now, so far this is only a 4-hour break of trend line support. We’ll need to wait until the daily close at 5 pm EST to know whether or not sellers can get the job done on a daily closing basis.

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If they do, I suspect sellers will defend the 0.7270/90 area as new resistance. As I mentioned on Sunday, the next key support comes in at the current February low at 0.7175.

But don’t dismiss the position of the 10 and 20 daily EMAs either. While volatile and trending markets can remain stretched for some time, a reversion to the mean usually presents the most favorable buying or selling opportunities.

A daily close below 0.7175 would open the door to the next support level at 0.7055 followed by 0.6965. Note that the 0.7020/30 area could also attract a bid on the way down.

I will remain bearish the NZDUSD as long as prices remain below former trend line support on a 4-hour closing basis.

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NZDUSD trend line support on the daily chart

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  1. This candle is definitely closing outside trendline on the daily.
    From the knowledge I’ve gathered from your materials which are my guidance.
    I’m of the opinion that we wait for it to retest then we begin to I correct? Though at the same time I see some momentum due to the trend getting lean in the end.

    1. It sounds like you’re looking for a signal service, which this is not.

      The “targets 0.7175” is my way of saying that “the market” is now targeting 0.7175. I’m not signaling to you or anyone else which level to target. That’s for you to decide.

    1. Again, this is not a signal service. And your account size has nothing to do with the use or placement of a stop loss.

    2. He is not in the position to give the you stop loss,take profit or entry point,we are not here for signal but to understand the technicalities of the need to start a The beginner’s guide to FX trading(school of pipsology)
      thank you

    1. Yes indeed it did, and retraced beautifully back to the trend line on the 4hr chart, with strong continued move to the downside,,,+50ish with 5 positions going…And thanks to Justin for his very keen perspective on higher timeframe technical analysis

  2. To be fair Justin here is doing us a great job..His analysis is on point and if u follow him correctly u are bound to gain a good number of pips…Since it aint a signal service,rather than ask for a stop loss point know how to manage your risk…Know your lot size and manage well and that way you can grow slowly…Stop placement depends on trading style so lets not pressure Mr Bennett into a service he doesnt offer….

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