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NZDUSD Breaks Trend Line Support, Targets 0.7175

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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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17 comments
russell says

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 sell.am I correct? Though at the same time I see some momentum due to the trend getting lean in the end.

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    saman says

    Definitely wait for the pullback!
    I AGREE

    Reply
    Ade says

    yes we wait for retest after the bearish candle broke the trendline. if we miss it. move onto the next trade.

    Reply
Kenny Z says

Wondering where you have your stop for EN, looks like it might be reversing….I got in last Fri @ 1.6845…..

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    Kenny+Z says

    Hello?

    Reply
Muzamil sana says

why u not mention stoploss alwys give targets just

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    Justin Bennett says

    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.

    Reply
    sepia says

    Justin is offering pipsology school for free,you need the knowledge not stop loss.
    thanks

    Reply
Adi says

sir, you must tell us about the stop loss because mostly traders doesn’t have a big account.Thanks for the great help.

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    Justin Bennett says

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

    Reply
    sepia says

    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 market.you need to start a The beginner’s guide to FX trading(school of pipsology)
    thank you

    Reply
Chucks says

AUDUSD also broke its trend line

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    Justin Bennett says

    Right.

    Reply
    Michael says

    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

    Reply
derrick says

i dont think i can wait for the retest let me go bearish now

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agus says

am still wait for reteset, ty sir

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Tendayi says

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….

Reply
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