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NZDUSD: Buyers Challenge Tuesday’s Bearish Pin Bar

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On Tuesday, the NZDUSD carved out a bearish pin bar after testing key resistance at 0.7300. This is an area we discussed on Monday before the recent intraday spike up to 0.7343.

Yesterday’s price action is an excellent example of why I favor the daily time frame. The pair’s failure to close above resistance at 0.7300 despite an 80 pip intraday rally is a sign of exhaustion.

The daily signal comes as the pair is trading up against wedge resistance. I posted this chart a couple of weeks ago, but I think it’s worth a repost.

NZDUSD weekly

Although Tuesday’s bearish pin bar hints at exhaustion and exposes downside targets, buyers are once again showing resilience. As I write this, the NZDUSD is trading at 0.7298 which is just above trend line resistance at 0.7290.

This brings us to a make-or-break condition for the pin bar in the chart below. Should buyers manage a daily close (5 pm EST) above 0.7290, there’s a good chance of a move higher from current levels. In other words, it would negate any bearish setup.

On the flip side, a daily close back below 0.7290 would keep the bearish scenario alive. It would also feed the potential for a move back to key support at 0.7200.

I’m short from 0.7290. The entry may have been a bit premature, but the viability of the position is contingent on today’s close as mentioned above. It’s also a relatively small position. I will consider adding to it but only if sellers can follow through on yesterday’s bearish signal.

Want to see how we are trading this setup? Click here to get lifetime access.

NZDUSD daily chart

Leave a Comment:

15 comments
Lukas says

Thanks Justin, waited the whole day for your analyse, I am stopped out twice now on this pair. And I bought silver too yesterday, little profit atm. Thankyou for your update as always!!

Reply
    Justin Bennett says

    You’re welcome, Lukas. Had some technical difficulties earlier which caused a delay in today’s post.

    Reply
MIMI says

I’ve been buying this pair from 0.6810 as I don’t see any strength in USD and I use strength analysis as part of my strategy. I think quite a lot of traders losing money buying USD.

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    Justin Bennett says

    The greenback has been weak, but the New Zealand dollar has moved to its own tune lately. Yesterday’s drop in the NZDUSD when the DXY was getting hammered is a perfect exactly. We’ll see what happens here.

    Reply
Feisal says

Justin Bennet you bring out a vital dimension that other anaysts either overlook or fail to articulate. Great work. Please keep it up.

Reply
    Justin Bennett says

    Thanks, Feisal. Cheers.

    Reply
Peter says

Hope u are right, Justin.. I see that ur attention is now all on nzdusd.. today post is the 5 th post on nzdusd in less than 2 weeks…u have been right for most signals and hope this doesn’t fail

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    Justin Bennett says

    Not all. USDCAD was a quick win this week.

    Reply
Lukas says

By the way, I am looking at the weekly chart and a breakout to new highs is possible too. I think if the weekly closes above last high, I buy NZD.

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Peter says

Ya… usdcad was a great trade and I Guess u must have good level of confidence when u post trade ideas publicly and hence usdcad is a natural win.. I am just very keen to see the outcome of nzdusd due to the fact for the numerous postings of nzdusd despite the ongoing bullish price movements in nzdusd these few days.. surely u must have the great confidence in this trade signal but let’s see what happens in a few hours time..

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Peter says

Finally nzdusd closed above 0.73 on daily close…I Guess bearish view is invalidated n shouldn’t go down anymore?

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    Darius says

    I had 2 traders buy nzdusd, closed one of them after this article, but left one of them open with breakeven SL and trailing stop. So far it looks going up.

    And why the price should care about wedge resistance? I do not see the logic. Only that retail traders see the wedge and they start selling. But what besides that?

    Reply
Sharif says

Both the currencies are weak today, NZD is a little weaker. I’m going short. Best wishes

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Marc says

I do not want to sound as if I want to trade your signal blindly but I think it’s great to know that you actually send out trade signal with an explanation why you’re taking the trade. I’m also short on this 2 days ago. And it’s great to have a someone like you confirm my trades. I hope you could keep your signal coming with an explanation. I will learn a lot from them. Thank you. BTW what do you think of NZD/JPY? Is it going to do the same as NZD/USD?

Reply
    Lukas says

    Hi Marc, I see NZDjpy as I buy because the weekly trendline is broken. Please take a look and you’ll understand.

    Reply
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