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. Any other charts can produce false signals.
The NZDUSD closed Friday below the 0.6350 key level.
You can see how 0.6350 has influenced the pair since September 25.
However, so far on Monday, the New Zealand dollar is challenging Friday’s breakdown with a gap up and 30 pip rally.
But this shouldn’t be a surprise to those who watched the latest Weekly Forex Forecast video.
In that video, I reminded viewers that this NZDUSD close below 0.6350 occurred on a Friday, which means lower than usual volume.
That can sometimes translate to false breaks.
Just keep in mind that it’s going to take a daily close back above 0.6350 to confirm the bear trap.
Such a close would also mean 0.6350 is once again serving as support.
Remember that I use New York close charts so that each 24-hour session opens and closes at 5 pm EST.
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It would also re-expose that 0.6430 area I mentioned in last weekend’s forecast video.
Keep in mind too that the potential inverse head and shoulders pattern here is still very much intact.
That doesn’t mean it will play out, but I do think traders need to respect the potential for a bullish reversal while above 0.6280.
Alternatively, if NZDUSD sellers manage to push the price back below 0.6350 before the 5 pm EST close today, it will keep the level intact as resistance.
With that in mind, I won’t be doing anything here until I see where today closes.