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A couple of weeks ago on February 25, I commented on an NZDUSD trend line that could trigger additional losses. The level extends from the December 5, 2017 low and came under pressure between February 23 and 26 before breaking down on the 27th.
Immediately after breaking trend line support the pair dropped 100 pips before finding support in the 0.7185 area. The upward consolidation over the last eight trading days has produced another retest of resistance at 0.7315.
If you review the weekly commentary from February 25, you’ll note that 0.7315 was a level of interest. It also capped the February 26 rally on a daily closing basis.
With the NZDUSD retesting this key resistance level, it’s time to evaluate whether or not a favorable short opportunity exists. In my opinion, if you secured a short entry at or near 0.7315, it’s one that could be worth holding.
For the rest, it’s going to come down to today’s close. If the pair forms a bearish pin bar following today’s retest of 0.7315, that too could present an opportunity to get short.
Key support comes in at 0.7185. A daily close (using a New York close chart) below 0.7185 would expose the 0.7050 area followed by 0.6960.
Alternatively, a daily close above 0.7315 would turn our attention to former trend line support, which would now serve as resistance.
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