Video: NZD/USD – Short Trade in Play

Some points to consider:

• New Zealand Dollar looks vulnerable for more losses after breaking through the range floor
• Short trade now in play aiming for below the 0.6310 pivot.
• Trade Strategy: Short at 0.6369

The NZD/USD Forex market is looking bearish once again as the New Zealand Dollar has broken through the range support near the 0.64 handle. Prices has hit a six year low last week but failed to find bearish momentum as this Forex market recovered. The NZD/USD then settled into a narrow consolidation pattern just below 0.6501.

Technical Analysis

Let’s begin today’s daily NZD/USD technical analysis. There is near term technical support lining up at 0.6220. A daily close below this technical level challenges the next technical support lining up at 0.6070. The alternative technical analysis, should the NZD/USD gain momentum, thus moving this Forex market higher notes technical resistance lining up at 0.6405. A break above this level challenges a cluster area ranging from the July 15 low at 0.6498 to 0.6520.

Trade Strategy

Now let’s discuss today’s NZD/USD trade strategy. If you recall, I have been hesitant about entering a trade in this market even though there were good technical signs. I made this call on risk to reward considerations. This recent move lower has now expanded the trading range enough for me to pull the trigger on a short NZD trade at 0.6369. I will place a stop-loss order for a move back above 0.6520. My initial target is 0.6520. Once I book half my profits on this short trade, I will move my stop loss to break even.