Transcript of Video
Hello everyone, this is today’s video analysis for January 8, 2019. Today we’re looking at the New Zealand Dollar versus the US Dollar [NZDUSD] for today’s trade analysis.
Let’s start here with the pink-shaded area right in the middle of the chart right around the 0.6710, 0.6735-level. You could see it coming across. Let’s go to the middle of the chart. The black circle finding support here on the way up. You could see the market finding support there and beginning a new phase of the uptrend. Go back a little bit further. You could see the black circle on the left. You could see resistance into the same level, 0.6710, 0.6735 in that same zone, finding decision point of resistance.
Market was coming up, found resistance, turned around and went back down. Then the blue circle on the left. Far left-hand side of the chart. Four times finding support into that area. Four periods finding support into that area. So, we could see that this pink-shaded area happens to be a significant decision point for the market. If it’s going to go down, it finds resistance underneath it. If it’s going to go up, it finds support on top of it.
That’s historical fact. We can’t change that. So, if that’s the fact, if support is on top and resistance is underneath, and today we’re sitting on top of the 0.6735-level, then we have this greater expectation. Never going to be a guarantee, but a greater expectation that we may be looking for support on top of that pink-shaded area.
Let’s zoom it in a little bit on the current market and you could see on the way down we found a couple days. Four days or so found support on top of it. Got underneath. Found resistance under the pink zone. So, just, again, reiterating the fact that this pink-shaded area, 0.6710, 0.6735 is a significant decision point. So, for the day today, it’s not too hard to figure out that as long as it’s on top of it, we would expect this to be support and the risk is the market gets back underneath the pink-shaded area and starts working its way back lower.
Zoom it out a little bit again. You could see the 100-period moving average coming into the chart. What’s interesting about that is as it came down on the downtrend, market came up. Found resistance underneath that 100-period simple moving average. Then it went up. Came down. Found support on top of the same moving average. So, we’ve come off of that moving average as support. Coming back up into that pink zone. Getting above the pink zone.
So, again, another clue that we found support. We’re starting to bounce back up. It doesn’t mean it can’t go down. It just means that’s just another clue or piece of evidence that we find that says maybe the market is looking for another turn back higher again above the 100-period moving average.
Let’s go ahead and zoom it back in again. Here we are, sitting right around that 0.6730, 0.6735-level, the top of the pink-shaded area. So, for the day today, the easiest clue is we don’t want to sell on top of that pink zone. Selling becomes difficult because we know that there’s potential, high potential, for support. Yesterday found support on top of the pink zone. So, we don’t want to sell on top of the pink zone. If there’s an opportunity, it’s more likely along above it. Risk stop loss would be underneath the pink zone if you decide to go long, looking for the market to continue its upside pressure.
Stop loss would be underneath it. You’re going to target back to higher levels. The blue zone happens to be 0.6780 to 0.6800. The green zone, 0.6830, 0.6850 would also be another decent target on the way back up. And again, the risk is it gets back underneath the pink zone and heads back to the yellow zone or lower. So, above the pink zone is what we’re looking for today.
Take it down to the four-hour timeframe. An interesting way to look at it here as well. And again, we could see the market coming down. Support. Congestion. Breakout underneath. Resistance. Fall. Came back up. Hesitated underneath there. Got above. Now we’re sitting on top of it once again. So, sitting on top of the pink zone is what we’re looking at today. The potential for support. An infusion of buy orders will give us higher confidence in that. Of course right now we don’t have that and the worst case scenario is the breakdown of 0.6710 and the continuation lower for the NZDUSD today.
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