NZDUSD Reaches Confluence of Resistance

by Justin Bennett  · 

December 12, 2019

by Justin Bennett  · 

December 12, 2019

by Justin Bennett  · 

December 12, 2019

NZDUSD buyers have been relentless since the December 2nd breakout.

We were anticipating that break given the potential inverse head and shoulders I’ve discussed several times on this site.

Furthermore, notice how the price action in late November began to pressure the 0.6430/40 resistance area.

The higher lows into that region suggested an imminent move higher.

Buyers didn’t even pause at the 0.6490 level, but they aren’t encountering some selling pressure around 0.6590.

That was the second key resistance level we were eyeing following the early December breakout.

But 0.6590 is more significant than you may realize.

Notice the trend line that extends from the March high in the chart below.

I could even make a strong argument that this trend line started back in April of last year.

That makes 0.6590 a confluence of resistance as it’s the intersection of a key horizontal level and a prominent trend line.

It also means NZDUSD buyers need to clear this area to extend the rally.

And an intraday spike above 0.6590 won’t cut it.

Buyers need to secure a daily close above the area. Until they do, it will continue to serve as resistance.

Important: I use New York close Forex charts so that each 24-hour session opens and closes at 5 pm EST. These charts are essential for trading price action.

Get instant access to the same Forex charts I use.

A daily close above 0.6590 would expose 0.6660, which is the measured objective of the inverse head and shoulders here.

I wrote about that objective on the 2nd.

Alternatively, bearish price action at 0.6590 such as a pin bar or engulfing candle could trigger a rotation lower into 0.6490 support.

Want to watch the NZDUSD video I just released in the member’s area?

Get a Lifetime Membership Today and receive exclusive member-only content including one to two new videos every day. Save 40% in December!

NZDUSD confluence of resistance

Continue Learning

Leave a Reply

Your email address will not be published. Required fields are marked *

  1. Now You Can Get Access to the Same Professional Forex Charts I Use!

    Get Access Now to start using correct five-day charts.

    These charts give you five 24-hour sessions each week and are the same ones I use to trade the Forex market. Other non-professional charts that provide six-day weeks can produce false signals.

    Download the Platform Today and get my 6-step swing trading cheat sheet as a free bonus.

  2. Hey Justin, I guess you already know this, but markets are driven by orderflow (volumes of buyers vs sellers), and the effectiveness of TA as a predictive tool depends on the volume of (heavyweight) traders who see the market similarly to the way you do, and place their orders in such a way that they create ‘self fulfilling prophecy’. Specifically, if there’s an excess of sell (limit) orders at the confluence level to absorb the buying pressure, price will stall and then reverse. Of course traders could have other reasons for selling at the same level: for example, perhaps their oscillators are showing ‘overbought’, perhaps there is a shift in fundamental outlook, or perhaps some very big players happen to have a coincidental agenda.

    At the end of the day, technical trading is about probabilities, albeit fuzzy ones, because every situation, even though it might appear similar to a historical pattern, has a different set of traders looking at it, making it unique. The best we can achieve with TA based prediction is statistics: how often in the past has a certain pattern caused a reversal. But markets, especially fx where each pair involves two different economies, and triangular equilibrium (e.g. GBPJPY = GBPUSD x USDJPY) is always maintained, are driven by a complex set of continuously changing factors whose relative impact at any point can’t be known by the retail trader, making prediction a somewhat problematic exercise.

    Anyway, all the best with your trading and your website, and have a great Xmas.

  3. Hellow Justin,
    This is Imran Parvej from Chittagong, Bangkadesh.

    I am reguler visitor of your website and youtube channel.

    About nzdusd inverse head and shoulder pattern, you mentioned here and youtube more and more time.
    Atlast market breakout successfully you drawed neck line.
    If you have no problem, would you please infirm me how you entry when neck line breakout, where your sl and tp.
    Did you use h4 time frame for entry, if yes how?

    Waiting for your response.


{"email":"Email address invalid","url":"Website address invalid","required":"Required field missing"}