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NZDUSD Reaches Second Target at 0.6850; Where to Next?

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Exactly one month ago, I pointed out a rather bullish looking pattern on NZDUSD.

The descending channel that formed between June and October offered a strong hint that a trend change was around the corner.

A channel like this following a strong move lower often acts just like a falling wedge.

This time was no different.

It was the daily close back above 0.6520 on October 15th that prompted me to write the commentary on the 16th.

Two weeks later, buyers got the job done with a daily close above descending channel resistance.

Remember, I use New York close (5 pm EST) charts. You can go here to get instant access to the same charts I use.

That breakout had us watching for buying opportunities near 0.6610. Sellers didn’t quite push prices that low, but we did see a move to 0.6626 before the next leg higher began.

On November 7th, I mentioned another opportunity to buy NZDUSD.

This time we were looking for a retest of the 0.6715 area as new support. That retest materialized between the 12th and 13th of this month.

The target for the second leg was 0.6850. Buyers are testing the level as I type this.

So now that you’re caught up, what’s the game plan moving forward?

Well, it’s similar to the one I released on the 7th. 

With NZDUSD testing 0.6850 resistance, it’s time to see if buyers can trigger yet another breakout next week.

As of this writing, I have no reason to believe buyers won’t extend prices above 0.6850. That leaves me waiting for a daily close above it followed by a retest as new support.

There is a chance that 0.6850 is the final resting place for this bull move. But as long as NZDUSD is in rally mode, I’m only interested in buying opportunities.

A close above 0.6850 next week would pave the way for a move to 0.6960.

The final target for a channel breakout like this is usually the structure’s inception point. For NZDUSD, that’s the June high at 0.7060.

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NZDUSD daily time frame

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23 comments
Fabrizio says

HI jUSTIN FROM FABRIZIO. MY COMPLIMENTS. AS REGARDS THE RULE OF MEAN REVERSION TO 10-20 MOV. AV. IS THIS VALID ALSO ON SMALLER TIMEFRAMES AS 1 HOUR-30 AND 15 MINUTES AND SO ON ? OR NOT?
THANK YOU A LOT

Reply
    Justin Bennett says

    Every time frame has a mean. But I don’t use the concept on anything below the daily chart.

    Reply
Vuyo says

Spot-on great analysis

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    Justin Bennett says

    Cheers, Vuyo. Enjoy your weekend.

    Reply
adi says

I got the last target thanks sir, you are great….

Reply
    Justin Bennett says

    You’re welcome. Well done.

    Reply
Cyril says

Thank you sir… Well appreciated, looking forward to the next week

Reply
    Justin Bennett says

    You’re welcome. Have a good weekend.

    Reply
      Leon Jonas says

      Had a few profitable trades on GBPNZD and GBPUSD yesterday. Even on GBPCAD. And that was even before the news broke about the UK minister’s registration. My trade on GBPNZD was based on your trade setup of the Wednesday. Thanks. Just a pity I am currently only paper trading.

      Reply
        Justin Bennett says

        You’re welcome.

        Reply
Daluxolo says

I also spotted the bullish breakout and I am currently in profit. Many thanks to you teachings Justin

Reply
    Justin Bennett says

    That’s great to hear! It’s my pleasure.

    Reply
jackie says

awesome analysis

Reply
    Justin Bennett says

    Thanks, Jackie. Have a good one!

    Reply
Tromidt says

gbp/usd and eur / nsd move up and down 100 pips in aday. I am glad i close some in zero and little profit

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Malik says

EURUSD Shorts Need to Be Careful.
– Justin
Please his previous post just before this NZDUSD post.

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Malik says

Thanks Justin. Great analysis.

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    Justin Bennett says

    Cheers, Malik.

    Reply
Ali says

Can we avail the charts new york close you use on tradingview? thanks

Reply
    Justin Bennett says

    Sure, if you choose OANDA.

    Reply
Antohi Dan says

Alll of my horizontal lines coincide with yours and that is the best! Still! Of course before I see your chart! In fact I have several horizontal lines started in 1995, 1998, 2000.In addition! Thanks Justin!Good weekend!

Reply
    Justin Bennett says

    You’re welcome. Enjoy your weekend.

    Reply
MOHD GHAZALI CHE MUDA says

good news

Reply
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