A little patience goes a long way as a Forex trader. This has never been more true after watching the last three days of price action on NZDUSD.
I mentioned the ascending channel you see below on Tuesday, noting that it was a bit too soon to make a commitment one way or the other. And although the three-month price structure is still intact, the pair is one step closer to choosing a final direction.
If we move down to the 4-hour chart, we can see a rising wedge that extends from the March 16th low. With the pair failing to hold above support, traders can begin watching for selling opportunities on a move lower toward the channel floor near 0.6760.
However, being that it’s Friday and considering the huge gaps we saw last weekend, I won’t entertain the idea of a position until Monday. Once the new trading week begins, we can reassess the situation.
For those interested in a trade that could last a bit longer (days or even weeks), there is another New Zealand dollar pair that has finally broken free from consolidation on the back of NZD weakness. More on this and other currency pairs in the upcoming weekly forecast.
As far as NZDUSD is concerned, I will be interested to see how former wedge support holds up as new resistance at the start of next week.