NZDUSD: Pair dives deeper under bearish channel within steeper widening channel as .6746 reached today
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 .6769 around time of publication today.
Earlier this month when NZDUSD was last reviewed in Ideas You Can Trade support was holding above .7000 but the overall trend remained bearish. Since then the downtrend continued where it hit its lowest today since June 2010 - just under .6750.
The trend is even more bearish than the already bearish channel depicted on the chart below in yellow (see point 1) which had been the previous driver of the bearish trend, and is even widening to the down-side in its current bearish channel (see short term bearish channel - point 2 in purple on chart below).
This steep trend within the widening bearish channel is similar to previous steep drops as can be seen on the additional weekly chart below.
If .6750 holds as support a recovery towards the top of widening channel could be prompted while the overall bearish theme looks likely to persist and push the pair to fresh multi-year lows and closer to .6500 in the near term.
Below are examples of how to trade a bearish continuation or a bullish reversal:
1. BULLISH BUY ENTRY ORDER: Create a “Buy Entry Stop” @ .6823 with a Limit to take profit @ .6862 and a stop-loss @ .6788 Risk/Reward Summary: Limit risk = +39 pips profit / (-35) Stop-loss risk =Gain to Loss ratio = 1.11
2. BEARISH SELL ENTRY ORDER: Create a “Sell Entry Stop” @ .6745 with a Limit to take profit @ .6701 and a stop-loss @ .6789 Risk/Reward Summary: Limit risk = +44 pips profit / (-44) Stop-loss risk =Gain to Loss Ratio = 1.00
Medium term daily candle chart:
Longer term Weekly Candle Chart: