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NZDUSD Slams Into Major Resistance

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Today we’re going to take a look at a resistance level that I’ve had my eye on for quite some time on NZDUSD. The market actually touched this level on the 18th but we didn’t get any solid bearish price action that told us the level was likely to hold.

Yesterday’s price action on the other hand is telling a different story. On the second day of battling resistance the pair put in a bearish pin bar, signaling that the bulls may be ready to turn this one back over to the bears.

I say “back” over because NZDUSD has been in a broader downtrend since July of last year. The pair recently broke out of sideways consolidation on January 21st and is now testing the underside of former channel support as new resistance.

NZDUSD daily chart:

NZDUSD daily forex chart

To the downside, we have several levels that could act as support. I won’t treat the first two levels as a signal to take profits, but rather an opportunity to add to any existing short position.

Summary: Potential to enter short using a 50% entry or wait for a break of the pin bar’s nose. Support comes in at .7444 and .7332 with an eventual target of the 2015 low around .7180.

NZDUSD daily forex chart

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