NZD/USD (0.7748)
- Resistance Levels: 0.7768, 0.7870, 0.7969
- Support Levels: 0.7680, 0.7604, 0.7470
The NZD/USD continues to push lower, for a number of reasons that I wrote about in an earlier article on how dairy prices are driving the Kiwi dollar lower. First off, refer to the daily MT 4 chart above. Note that sellers are now looking below 0.77 to challenge a support cluster area that ranges from 0.7708 to 0.7680. A daily close below these levels will challenge 0.7604 and lower. This also happens to be the lows set in July 2013 and September 2014.
The alternative scenario would need to see a daily close above 0.7768. If this happens then the Kiwi will challenge 0.7870.
Let’s discuss some trading strategy. Look at the below 1 hour MT 4 chart. Here you will see the formation of a shooting star. This is indicative of more losses on for the day. However, we are very close to a support level and would need to close below that level to really justify short trades for now. At least from a risk to reward perspective. There are no clear bullish signals, so the strategy is flat for now. If you are trading on a daily perspective, look to place a stop loss at the technical levels to protect downside risks. The undertone is appearing bearish, just waiting for that move below 0.77.
Trading strategies are for educational purposes only. They should not be construed as trading advice.