Daily Price Action
Shares

NZDUSD Rejected by Support-Turned-Resistance, Eyes 0.6970

Shares

NZDUSD bulls may have finally met their match. The ten-month trend line that failed on November 15th is now acting as resistance. This level was responsible for yesterday’s late-session selloff.

On Monday, I mentioned the idea that the 0.7170 area needs to hold on a daily closing basis. Otherwise, the bearish bias would be in question.

And although buyers won the battle early on Thursday, sellers did their part to taint the victory. As a result, the pair ended up closing off its session highs by 50 pips.

However, the daily chart didn’t quite produce a bearish pin bar. If anything I’d call it a bearish rejection. Whether or not that equates to a valid sell signal depends on your trading style.

But the fact that the pair failed to close the day above the 0.7170 area does suggest that sellers are beginning to take an interest. From here the 0.7185/90 area is likely to attract offers should buyers make another run at the ten-month level.

Also, keep in mind that the ascending channel I pointed out on Monday is still in play. This introduces a second more conservative option for those who remain bearish the NZDUSD. This is the option I prefer given the parade of false breaks we’ve seen throughout 2016.

Want to see how we are trading this setup? Click here to get lifetime access.

NZDUSD resistance area

Leave a Comment:

4 comments
nomani says

I see NZDUSD payer was failed to make new higher high. That’s why this payer make a reversal pattern that’s H & S pattern. At thursday the bearish rejection candle at 0.7185 this resistance level is a new lower high? I already took a sell entry at 0.7170 level. My think was this area is a lower high and the trend is now rally down trend and will make new lower low. Is my analysis correct?

Reply
    Justin Bennett says

    Nomani, that sounds pretty close to my outlook for the pair.

    Reply
Zahra says

Hi Justin

Love your course so far, i was looking at your analysis, does this pair not also form a bearish flag pattern as of current?

Reply
Add Your Reply