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NZDUSD: Keep an Eye on These Two Levels

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On March 10th, I discussed the breakout potential of NZDUSD.

The multi-year wedge pattern was going to provide us with a breakout, one way or the other.

The floor of that wedge extends from the 2000 lows with the ceiling coming off of the 2014 high.

Hours after I wrote the March 10th post, I shorted the NZDUSD just above the 0.6300 handle.

I shared this entry with Daily Price Action members in the NZDUSD forum.

Here’s what I wrote to members on March 10th:

NZDUSD March 10th member's post

I followed that comment by stating that NZDUSD has 1,000+ pip (downside) potential, which I still believe to be true.

I took a partial profit on the position last week when it was more than 600 pips in the green.

If you watched Sunday’s forecast video, you know 0.5650 is support.

It’s a level that has influenced the NZDUSD since 1998.

Take a look at the monthly time frame between 1998 and 2003 to get a sense of why I consider 0.5650 to be so significant.

It’s no surprise then to see the NZDUSD rallying from 0.5650 this week.

On Sunday, I also discussed how 0.5920 and 0.6200 are both key resistance levels to keep an eye on.

0.5920 was key support for the pair between 2004 and 2006, while 0.6200 is the bottom of that multi-year channel floor from the 2000 lows.

Those are two levels (0.5920 and 0.6200) that could produce short opportunities in the coming days and weeks.

In the meantime, however, I’d like to see NZDUSD higher.

That would help to confirm the short-term descending channel I’ve drawn in the chart below.

Notice that the NZDUSD tested the bottom of that descending channel on March 19th.

If this pattern is significant, a move to 0.5920 or even 0.6200 would not be a surprise.

In summary, NZDUSD could strengthen in the short-term while above 0.5650, but the long-term downtrend is intact with resistance at 0.5920 and 0.6200.

Want to watch the NZDUSD video I just released in the member’s area?

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USDJPY support and resistance levels

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7 comments
Justin Bennett says

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Ron says

(New) I see you just look back and highlight these daily charts . I don’t see (yet) from the last 2 days how these help. Other then just waiting for maybe days to see If they hold your sup/rest lines. I am more of a 22 sec 3 min and 9 min trader? AUD/USD

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    Justin Bennett says

    Ron, I’m a price action trader, which means I use these key levels in combination with price signals to form decisions. It’s how I managed to get short the NZDUSD on March 10th for a 600 pip move lower. See the post above.

    Reply
      Martin Njeru says

      Justin what do you use as entry trigger or confirmation signal before placing a trade?

      Reply
        Justin Bennett says

        It depends. Sometimes it’s a pin bar or engulfing candle. Other times I watch how the market reacts around a key area. The environment plays a critical role too. For instance, I told members a few weeks ago that waiting for retests in this volatile environment wasn’t going to work, which is why I took a more aggressive stance with my recent shorts on NZDUSD and USDJPY to name a couple.

        Reply
Lawrence udoh says

Please me reliable trades daily. I m still using demo and I want to graduate to live trade.

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Wali Shah says

owesome justin u are the master every post i am reading and also i am looking your weekly forecast your study material and forecasts are 80 write i learned alot of thing i have covered from u i am studying your stuff form 4 years its owesome and working technical anylysis i wants to thankyou so much love from pakistan sindh

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