The last time we spoke about Kiwi, we were watching for a NZD/USD momentum push into previous trend line support, while looking for this level to possibly switch and this time act as resistance.
As you can see, the level held and price proceeded to print 6 red daily candles in a row as the bears took control of the market.
But after dropping the 370 pips peak to trough, price has now pulled back to test this marked support/resistance zone.
While I haven’t drawn it here, just by looking at the chart I can tell that there’s also confluence of the 50% fib retracement in there. Remember, any confluence is good confluence!
Zooming into the hourly chart and we can see the latest retest of short term support this time as resistance.
It’s this level that gives us our entry because it allows us the risk profile that we are comfortable with. For example you can put your stop just above the short term level if you’re aggressive, or you can place it back above the daily zone and hold longer term.
Either way, the risk:reward is there.
Do you see opportunity trading NZD/USD? Open a LIVE forex account with Vantage FX.
Dane Williams – @VantageFX
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