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.
A few days ago, I hinted at the idea that NZDUSD sellers were tiring.
I was by no means bullish, but I was questioning how much longer sellers could keep this up.
There were two reasons for this.
First, NZDUSD has given up over 500 pips without a retracement.
That’s rare when you consider how this pair has behaved over the last few years.
And second, NZDUSD hit the bearish flag objective at 0.6350 on August 28.
That also happened to be our target.
When a market reaches an objective such as 0.6350, it tends to trigger a reversal or at least a corrective move.
The NZDUSD went below 0.6350, but in my opinion, these last four days may be nothing more than a bear trap.
We’ll soon find out, but Tuesday’s bullish engulfing candle should attract additional buying pressure.
As I wrote on the 30th, though, NZDUSD bulls need to secure a daily close back above 0.6350 if they intend to push prices significantly higher.
If they can do that, we could see the pair reach back to the 0.6420 region.
A failure to break 0.6350, on the other hand, would keep sellers in control and the 0.6270 area exposed.
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