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NZDUSD Tests Confluence of Resistance at 0.6200

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I first mentioned the 0.6200 resistance area on NZDUSD on April 7th.

It’s the intersection of a key horizontal level and a previous multi-year trend line from the 2000 lows.

That trend line broke down with the March selloff, as did the 0.6200 horizontal level.

NZDUSD monthly chart showing two trend lines
NZDUSD monthly time frame

It has taken NZDUSD over two months to climb back to 0.6200 after reaching a low of 0.5468 on March 19th.

Just keep in mind that this may not be the top.

NZDUSD has been a difficult pair to trade of late, primarily due to its reliance on risk assets, which have been propped up by central banks.

The lack of direction from the US dollar isn’t helping matters, either.

And if I look at the monthly chart above, the former trend line support comes in closer to 0.6270 than 0.6200.

But the longer NZDUSD and risk assets as a whole correct higher via a slow grind, the greater the volatility is likely to be on the other side.

The key is getting the timing right.

However, at a minimum ten to one reward to risk ratio, you can be wrong a few times and still come out ahead.

The key for NZDUSD going forward is two-fold.

First, the resistance area between 0.6200 and 0.6270 needs to hold on a monthly closing basis.

Second, sellers need to close the pair back below 0.6150 followed by the short-term trend line from the year-to-date low.

Disclaimer: I hold an NZDUSD short position from 0.6182.

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NZDUSD daily time frame showing support and resistance levels
NZDUSD daily time frame

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10 comments
Justin Bennett says

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Arun says

Justin, fm what I see in charts, the pair is now a buy on dips.

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    Justin Bennett says

    Happy buying.

    Reply
Samuel says

Thanks for the up dates please.

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    Justin Bennett says

    You’re welcome.

    Reply
Ryan Bell says

Paid for his membership and I get no emails to join just took my money, does not reply to emails trying to contact him

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    Justin Bennett says

    Ryan, I just looked and the reason the email didn’t reach you is because you entered your email address as “.con” instead of “.com”. I’d be happy to send you a screen grab if you’d like.

    Anyway, I just resent the email to the correct address.

    Reply
Sherwin says

Ey, Justin! Just want to clarify what signal you used for your 6185 sell? I do not see any good bearish PA on the daily chart. I do see a double-top setup in the 4HR chart which I think you could have used. I also note that the first top was a pin bar. Or was this one of your Risk-Rewards-based calls (relying perhaps on that confluence of resistance)? Thanks!

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    Justin Bennett says

    Risk reward, confluence of resistance, and a small starter position.

    Reply
Mark Gunnell says

Justin, if the NZD does break lower, what is the price target that you are looking to close your short trade?

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