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Forex: Ideas You Can Trade - NZDUSD .7200 Imminent Support Line

Posted by Steven Hatzakis on May 26, 2015 2:24:00 PM
NZDUSD: Returning lower within overall bearish channel as median line of channel lost and .7200 next support area

The daily candle chart below shows the medium term price history of the New Zealand Dollar (NZD) versus the United States Dollar (USD). This currency pair is known as NZDUSD, and is trading around .7230 around time of publication today.

Earlier this month when NZDUSD was last reviewed in Ideas You Can Trade support was tested above .7400 but had subsequently failed and has brought the pair towards current levels and after .7300 was lost earlier in today's trading session.

Today the pair has broke below the median line of the overall bearish channel (see point 1 on chart below in yellow) and fast approaching support around .7200 which appears imminent, and with further support near the February low around .7175.

If support holds - then a brief recovery could follow - but the overall trend remains bearish. If .7200 fails and a steep drop continues - then the lower support line of the medium term bearish channel may be targeted, and which would coincide around the .7000 price range over the short term (based on current trend line trajectories).

Below are examples of how to trade a bearish continuation or a bullish reversal:

1.  BULLISH BUY ENTRY ORDER: Create a “Buy Entry Stop” @ .7285 with a Limit to take profit @ .7319 and a stop-loss @ .7260 Risk/Reward Summary: Limit risk = +34 pips profit / (-25) Stop-loss risk =Gain to Loss ratio = 1.36

2.  BEARISH SELL ENTRY ORDER: Create a “Sell Entry Stop” @ .7218 with a Limit to take profit @ .7177 and a stop-loss @ .7251 Risk/Reward Summary: Limit risk = +41 pips profit / (-33) Stop-loss risk =Gain to Loss Ratio = 1.24

Medium term daily candle chart:

NZDUSDDaily may 26 2015 note

Topics: forex trading, technical analysis, New Zealand dollar, NZDUSD, Kiwi, Kiwi Dollar

 

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