Daily Price Action
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NZDUSD: Watch for This Consolidation to End

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The last time I wrote about NZDUSD was April 21st.

That was the first time I discussed the potential for a 2,000 pip drop.

Let’s just say my view wasn’t all that popular with some people.

But here we are eleven trading days later, and the NZDUSD is up 40 pips.

To some, a 40 pip gain may sound like a lot.

However, when you compare it to the 900 pip plunge in March that took just eight days, the latest correction is found wanting.

So, I’ll go ahead and revise my view from April and say there is now a 2,100 pip opportunity unfolding.

NZDUSD monthly time frame

Could I be wrong?

Of course, but even if you compare the angle of this latest rally to the March selloff, you’ll see that NZDUSD is in correction territory.

What do angles have to do with anything?

Everything, as the angle of one move relative to another illustrates the amount of supply and demand.

We had an impulsive move lower in March, and now a correction that has lasted for six weeks.

That means the next phase is likely another impulse move lower.

And if you saw Saturday’s forecast video, you know about the weekly bearish pin bar that developed on the AUDUSD.

It’s no secret that the AUDUSD and NZDUSD often move in tandem.

So, a similar analysis of the weekly time frame can be applied to the New Zealand dollar.

Last but not least, please understand that both the Australian dollar and New Zealand dollar are tracking equities closely.

Correlation between S&P 500, AUDUSD, and NZDUSD
4-hour correlation between S&P 500 (blue) and AUDUSD (red) and NZDUSD (green)

That adds a headwind to any shorts as we’re basically fighting the central banks that are scrambling to prop up equities.

It’s why the AUDUSD and NZDUSD have remained buoyant.

With that in mind, I kept this morning’s short position from 0.6054 relatively small.

I announced that entry in the member’s area.

I won’t add to the position until I see NZDUSD take out that 0.5950/60 area.

That would open the door to 0.5860 and perhaps 0.5650.

My bearish outlook for NZDUSD will remain intact as long as the pair trades below 0.6200 on a daily closing basis.

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

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NZDUSD daily time frame

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13 comments
Justin Bennett says

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Franklin says

Please tell me a little bit about yourself, Like… did you study any financial course in the university? because your analysis of the market is beyond self-taught.

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Christopher Coyle says

See more upside for NZD/USD, target(0.6266 ) as strong probability.
ANALYSIS: Daily TF (stoch) beginning to bottom, Macd cross over, Ma`s cross over on the (14 +50). However RSI struggling at (0.60) indicates more sideways action before we have that last push up.
TRADE: SHORT at (0.62666), Daily TF, Reason; probability coincident with a touch of the 200MA / 61.8% Fibo retracement.
Thanks for the heads up Justin 🙂

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Ifeanyi says

Good analysis Justin. Please let me say this here, I have sent you an email regarding that. I saw a $7 ultimate price action training package the other day on your website, it was counting down to a day remaining for the offer to close. I paid the amount but have yet to receive any educational material or anything related to the training. Isn’t the offer true? Thanks in anticipation of your response.

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    Laide Olowookere says

    $7 ? That cant be on this site. I have been here for more than 4 years haven’t seen a thing like that.

    Reply
Felix says

Thanks very much Justin

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Vivek Kumar says

Very correct insight into NZDUSD impending bearish trend

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Frank Rawson says

I went short yesterday with a target of 0.5865

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Martin Njeru says

I will short the airs after Unemloyment claims which are underway………………………………..

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ali says

Thanks for excellent analysis sir justin and god bless you.

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Tomi Odunlami says

I just love your pin point analysis. Thumbs up Justin!

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Axole Maranjana says

Hey Justin, I always use your analysis to look for trade opportunities and I must say I am a very greatful for your weekly setups. So I was wondering if you can analyse Usdzar too?

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