NZDUSD - A Deep Pullback Or A Breakout?
Analysis:
We took a trade on this pair the other day but we ended up getting stopped out due to the bearish news that came out for the USD however we're going to take another shot at NZDUSD. We are still bearish on this pair because we're still in a downwards trend. We haven't formed a higher high yet which confirms that we're still in a downwards trend. Price has pulled back a fair bit but we see this as a deep retracement and a great shorting opportunity. We're currently at a key level which has held multiple times so we expect it to hold again. For more confluence at our area we also have the 61.8% fib retracement level which is often seen as the strongest fib level so we have more confidence that this level will hold and that this is where the bears will take back control. Another confluence factor that we have is the downwards trendline. This trendline has held multiple times before, causing huge rejections so we expect that this will happen again which is a positive for this setup. Fundamentally the USD is the 2nd strongest major currency whereas the NZD is the 4th strongest major currency so this goes in our favour to be on the short side of NZDUSD. For more fundamental confluence we have an increase in both long and short positions on the USD by institutions which is pretty neutral whereas for the NZD we didn't really have an increase in long positions but we did see an increase in short positions by institutions so this is yet another confluence on why we want to be shorting this pair. We have had some bearish news come out recently for the USD however on Wednesday when Fed Powell testifies we could see some bullishness coming back to the USD. If the market gets any reasons to go long on the USD then we would see this pair drop and with all of the technicals and fundamental analysis we've done we think that we'll see the bulls step back in on the USD which is why we are currently bearish on NZDUSD despite the current market conditions.
Please feel free to leave any comments you have and like this idea if you agree with us. Any feedback or comments will be read. We appreciate it all.
Stay Safe - JPI
Disclaimer:
This does not constitute as financial advise. We are not responsible for any monetary loss that you endure. Trading is hard to be profitable with and we take losses just like everyone else does to. Our ideas won't always be correct which is why we urge you to always do your own analysis first before entering into the market but please feel free to use our analysis to assist you with yours.
We took a trade on this pair the other day but we ended up getting stopped out due to the bearish news that came out for the USD however we're going to take another shot at NZDUSD. We are still bearish on this pair because we're still in a downwards trend. We haven't formed a higher high yet which confirms that we're still in a downwards trend. Price has pulled back a fair bit but we see this as a deep retracement and a great shorting opportunity. We're currently at a key level which has held multiple times so we expect it to hold again. For more confluence at our area we also have the 61.8% fib retracement level which is often seen as the strongest fib level so we have more confidence that this level will hold and that this is where the bears will take back control. Another confluence factor that we have is the downwards trendline. This trendline has held multiple times before, causing huge rejections so we expect that this will happen again which is a positive for this setup. Fundamentally the USD is the 2nd strongest major currency whereas the NZD is the 4th strongest major currency so this goes in our favour to be on the short side of NZDUSD. For more fundamental confluence we have an increase in both long and short positions on the USD by institutions which is pretty neutral whereas for the NZD we didn't really have an increase in long positions but we did see an increase in short positions by institutions so this is yet another confluence on why we want to be shorting this pair. We have had some bearish news come out recently for the USD however on Wednesday when Fed Powell testifies we could see some bullishness coming back to the USD. If the market gets any reasons to go long on the USD then we would see this pair drop and with all of the technicals and fundamental analysis we've done we think that we'll see the bulls step back in on the USD which is why we are currently bearish on NZDUSD despite the current market conditions.
Please feel free to leave any comments you have and like this idea if you agree with us. Any feedback or comments will be read. We appreciate it all.
Stay Safe - JPI
Disclaimer:
This does not constitute as financial advise. We are not responsible for any monetary loss that you endure. Trading is hard to be profitable with and we take losses just like everyone else does to. Our ideas won't always be correct which is why we urge you to always do your own analysis first before entering into the market but please feel free to use our analysis to assist you with yours.
Trade active:
Our entry criteria has been met and our order has been filled we we're currently trying again with NZDUSD sitting in a short position expecting the bears to step back into the market and push price down, continuing the downwards trend.
Comment:
As mentioned in our USDCHF idea yesterday we had some news that came out for the USD when Fed Powell spoke which didn't look to bullish for the USD causing the USD to lose some strength but this doesn't take away from all of the other confluences factors that we have for our idea which is why we are still bearish on the NZDUSD. Price doesn't look like there is much bullish strength or momentum we currently we still see this trade as valid. There could be a possibility that price retests the 61.8% fib retracement and the downwards trendline but if this happens then we expect that price will form a "double top" pattern which is another bearish indication before we then see a big rejection and move to the downside. With unemployment claims coming out later today and with Fed Powell testifying again if we see any bullishness then we expect that the USD will rally as at the moment there is a lot of bullish momentum behind the USD and this could be the catalyst that it needs before we see a big move. If the news comes out bearish then again as mentioned in our USDCHF idea we will see how the market reacts and we will go from there.
Comment:
Again like mentioned in our EURUSD trade and USDCHF trade Fed Powell spoke yesterday and we've since seen some bullish momentum for the USD which has helped our trades. As shown in the photo price retested the area that we expected it to and it's held that area as resistance showing that the bears are in control of the market. Technical wise there isn't any strong areas of support until we reach out take profit so it looks like there is a clear path to our take profit and with the USD strength that we're seeing currently this looks very probable. Later today we have more USD news coming out which if it comes out better then expected then this will just strengthen our USD bullish thesis and will help out our trades. If the news comes out worse then expected then we think that we'll see a little bit of pushback on the USD but ultimately the USD strength seems too much to be stopped yet, so we'd still be bullish on the USD but price might just take longer to reach our take profit. Overall price action is showing us strong signs that we'll get a move to our take profit so everything is playing out as expected.
