Transcript of Video
Hello everyone, this is today’s video analysis for October 10, 2018. Today we’re looking at the New Zealand Dollar versus the US Dollar [NZDUSD] for today’s trade analysis.
We’re starting here on of course the daily timeframe first to get a look at the trend. Overall, for quite a long time now, we’re going all the way back to early this year, back into March and April of this year. We started all the way up here at the top of the chart and have been moving lower ever since.
In recent days, even making the multi-year low down into the low-0.6400s. 0.6430 or so being the low at the bottom of the chart. So, we’ve been in a downtrend. That’s something we can’t ignore and we need to pay attention to that, because if the trend continues, we could see new lows being made.
However, through the life of this trend, you could see four periods or four timeframes where the market made rebounds, retracements, corrections along these short blue trend lines. You see a little bit of a fall here and then a little bit of a pullback. A fall. Some congestion. Pulling back a little bit. A fall. Pulling back. A fall. Pulling back. Every time it’s fallen, it’s made a new low.
Well, we’ve seen our new low now made. Like I said, in the recent days, down into the low-0.6430 area. The question is are we going to see the continuation of the trend and it move through the current support area and go lower, or is it time for another one of these periods of correction or retracement within the overall long-term downtrend? So, we’re watching for evidences of that down here at the bottom.
The support zone right now. The pink-shaded area at the bottom. 0.6455, 0.6430 is the zone I have down here highlighted in pink for the NZDUSD. If it finds support as it has historically, we could look for it back into the blue zone. 0.6520, 0.6500, or even the green zone, 0.6570, down to 0.6550 and challenge the black trend line again. Of course if it ever breaks the black trend line, we’ll shift our perspective of the trend. But for the time being, we’re down here.
I think the first thing that we would want to say about our trading opportunities for the day today is that it’s a difficult place to sell it. I mean it’s not too difficult to see. You look back in time. You see this area right here, highlighted with the green circle at 0.6520, 0.6500. The support there. Four days. Eventually, turning and started moving back higher and that’s when it began the retracement. Over here on the left, five. The second blue line here. Been five days and then it started turning around and going back up.
So, here we are three days. Now the fourth day into the 0.6455-level. The question is: is it going to find support and go back up as it has historically at a low, or will we eventually break down through that pink zone and head lower? So, that’s our focus today here on the NZDUSD. One of these two scenarios is what we’re watching for price action that implies what we’re going to do. So, the first thing is if I was going to sell this currency pair, if I was going to consider selling it in the direction of the trend, I think right now is a very difficult time to do it. The only time I would really consider selling is the market gets below the pink zone, 0.6430, and it hasn’t done that yet.
So, that’s the only thing I’m going to do, is wait for it to break the pink zone before I would decide to go short. Sure, there are opportunities of course back at the blue zone or maybe back at the green zone to go short, but the market is not there right now, so it’s not something we have to consider. The biggest thing would be a break of the pink zone. So, if we’re not selling it on a break of the pink zone because obviously it’s not doing that, then we also could consider intraday opportunities for bounces off of the support and potentially a short-term corrections or reversals here for the NZDUSD.
So, we’re watching for price action that indicates potential bounces off of this pink zone. So, we’re looking for infusion of buy orders. A change of the trend pattern. Lower highs, lower lows becoming higher highs, higher lows. We’re looking for those things from the pink-shaded area.
Let’s take it down to the four-hour timeframe and take a look here on the four-hour. We see a little bit of a different picture now, don’t we, where yes, it still hasn’t broken below 0.6430, but we have seen infusions of buy orders. It’s gotten above the pink zone and now sitting on top of that pink zone again, which by the way, some resistance here. 0.6455 as support.
So, the game today is as long as it stays above that pink zone, we have potential for a long shot here on the NZDUSD. And only if it breaks underneath, that’s the risk in the scenario. So, if we’re placing a stop loss on any long trades, we just don’t want it to get back below the pink zone because that signals a continuation of the downtrend if it gets below the pink zone. So, any longs that we decide to take today, we’ll have a stop loss just underneath the lows here and the 0.6430-level.
We’ll target the blue zone of course as our target. The green zone beyond that or even the orange zone, where the black trend line is all the way up here at the top. But at least right now, it’s pretty easy to see we don’t want to sell on top of the pink zone intraday. We maybe more opt for a long shot for the day today on the NZDUSD.
From Forex Traders Daily, this has been your daily analysis with Ross. If you would like to get Ross’ analysis on all the currency pairs he’s watching and all the trades he takes today, join him in his live Trade Room by clicking on the link below. Please leave any comments you have about today’s video in the comment section below.