Over the weekend I commented on how the NZDUSD was likely to attract offers at 0.6920/30. This area represents former descending channel support that extends from the October low at 0.7034.
So far today’s high is 0.6929, and the pair is off that mark by 27 pips at the time of this writing.
While there’s still plenty of time left in the session, it would appear that sellers are holding their ground. This comes after the pair slipped below channel support on December 19th.
As long as sellers hold prices below 0.6930 on a daily closing basis, my bearish bias will remain. The next level of support comes in at 0.6840. This area was a key pivot for the pair between April and May of this year.
Whether or not we see buyers test the 0.6930 resistance area again before giving in is unknown.
However, a bearish pin bar today could be enough to validate an entry, particularly given the inside bar that formed on Tuesday. This formation would make for an inside bar pin bar combination, which can be a useful indicator of a market’s intentions.
As mentioned above, immediate support comes in at 0.6840. A daily close below that would expose the May low at 0.6685.
On the other hand, should buyers manage to close today’s session above yesterday’s high at 0.6903, it would negate the trade idea. An essential component of the inside bar pin bar combination is that the open and close of the pin bar must fit within the inside bar’s range.
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