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NZDUSD Buyers Challenge Friday’s Breakdown

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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.

Get access to the same charts I use.

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.

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NZDUSD potential false break on the daily time frame
NZDUSD potential bear trap

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10 comments
Justin Bennett says

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Eliezer Andino says

Got anything on the NZD/CAD Justin?Thank you for the videos they are very easy to understand.

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    Justin Bennett says

    Not at the moment.

    Reply
Jane says

I felt a bit conflicted with this pair because we still have potential H&S inverse but again on weekly we have a bearish engulfing. You are right no guarantees either way so with that word from you I’ll watch and wait. Thanks!

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    Justin Bennett says

    You’re welcome.

    Reply
Mohammad says

Justin what is your offer for GBPUSD?

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The Kid says

WEEKLY TF: MA`s negative down. Draw a trend line on the weekly from 2001 thro 2009 and we are due another push down for a third touch with confluence that the weekly Stochastic is overbought as is the 4HR TF Stochastics at price level (0.63679) with Macd heading south. DAILY TF: looks more favourable on Stochastics for a LONG trade. ACTION: wait for 4Hr TF to bottom out and then take a revised view for LONG entry. Risk mitigation is to wait until the weekly trend line is touched. I have a pending trade down at entry (0.6163). Check fundamentals on forex calendar for confluence and entry.

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Yousef Adeeb says

Great , Thank you

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Gary says

Hi Justin
First of all thank you VERY MUCH for all your analysis. It really helps!
Second, it looks like the bear trap is confirmed looking at where NZDUSD closed on Monday. In Addition is came down to sit on Channel support for Wed morning, just in time for the important rate announcement.
Third, I know you don’t trade the news which is a good principle, but i am. I know that the market is expecting a decrease in rates but from a Technical point of view, it looks like the NZDUSD will move up the channel, based on the head and shoulders still being intact and Monday’s close. This will be my only trade until it reaches resistance. Cheers and take care.

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