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NZDUSD is printing fresh multi-year lows today following last month’s break of channel support.
I wrote about the pending breakdown on July 29th.
We were waiting for a close below 0.6630 to get short with a target of 0.6490.
The August 5th session reached our target, putting in a low of 0.6488.
The idea played out quicker than I anticipated, which is never a bad thing.
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However, I wasn’t quick enough to sell NZDUSD again at 0.6590. I had the resistance level correct, but I wasn’t able to pull the trigger fast enough.
Notice how Tuesday’s session reached a high of 0.6589.
That’s one pip below the 0.6590 resistance level I wrote about the day before.
Here’s what I wrote on Monday:
I have no interest in selling NZDUSD down here as the risk to reward ratio is less than favorable. I also think we could see further gains from the 0.6490 support area.
If the channel that formed in June and July is a continuation pattern, we could see more downside toward the 0.6350 region.
But again, I think we’re in for a rally before that scenario unfolds.
And if that 0.6590 resistance area doesn’t trigger a bearish price action signal, I will look to the 0.6660 region.
All of the above played out perfectly, so I hope someone out there was able to capitalize on it.
As for me, I’m just a spectator at the moment.
I do still think 0.6350 is possible here, so I’m interested in getting short again at some point.
If today’s session closes at 0.6490, that could be the start of the next opportunity.
A close below 0.6490 followed by a retest of the level as new resistance would pique my interest.
Key support comes in at 0.6420, which is where last October’s rally began.
Below 0.6420 is, of course, the measured objective at 0.6350.
Not only is 0.6350 the objective of this latest continuation pattern, but it’s also 2016 low, so it’s one to keep an eye on as things unfold.
Alternatively, a daily close back above 0.6490 would re-expose 0.6590.