NZD/USD Forex Signal – 16 May 2018

Yesterday’s signals were not triggered, as the bullish rejection was a little below the support level at 0.6862, although the area has been broadly supportive.

Today’s NZD/USD Signals

Risk 0.50%.

Trades may only be entered between 8amNew York time and 5pmTokyo time, during the next 24-hour period.

Short Trades

— Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of 0.6956 or either of the descending trend lines shown in the price chart below.

— Put the stop loss 1 pip above the local swing high.

— Move the stop loss to break even once the trade is 20 pips in profit.

— Take off 50% of the position as profit when the trade is 20 pips in profit and leave the remainder of the position to ride.

Long Trade

— Long entry following some bullish price action on the H1 time frame immediately upon the next touch of 0.6858.

— Put the stop loss 1 pip below the local swing low.

— Move the stop loss to break even once the trade is 20 pips in profit.

— Take off 50% of the position as profit when the trade is 20 pips in profit and leave the remainder of the position to ride.

The best method to identify a classic “price action reversal” is for an hourly candle to close, such as a pin bar, a doji, an outside or even just an engulfing candle with a higher close. You can exploit these levels or zones by watching the price action that occurs at the given levels.

NZD/USD Analysis

I took a bearish bias yesterday and this worked well for a few hours before the price bounced close to the support level identified at 0.6859, so it was a reasonably successful forecast. The price has been rising strongly from that supportive area and at the time of writing is strongly testing the next resistance level at 0.6892. The long-term picture is still bearish, with the major trend lines intact. However, the action is likely to become increasingly unpredictable as we get closer to New Zealand’s annual budget release.

 

Regarding the USD, there will be a release of Building Permits data at 1:30pmLondon time followed by Crude Oil Inventories data at 3:30pm. Concerning the NZD, there will be a release of the Annual Budget at 3am.

This article provided by NewsEdge.