Transcript of Video
Hello everyone, this is today’s video analysis for November 28, 2018. Today we’re taking a look at the New Zealand Dollar versus the US Dollar [NZDUSD] for today’s trade analysis.
Looking here at the daily timeframe, really two different trends I want to recognize here. First is of course the long-term downtrend, going all the way back to the beginning of this year. January, February, March, we were at the top left-hand corner of the chart into the mid-0.7400s. 0.7425, 0.7450 up at the top of the chart. So, we were tackling into that and we’ve seen a fall significantly all the way down into the 0.6400s down here at the very bottom right-hand corner of the chart.
So, long-term downtrend. And then, over the past couple of months, really since about late September, beginning of October, we started this rise along the rising black trend line. So, a little bit of a change in trend as we had lower highs and lower lows. That started shifting to higher lows and higher highs. A couple of weeks ago, even breaking through, breaching the 100-period simple moving average here, giving us a clue of some more potential bullish market action as it continued to pressure higher.
Pushing through the pink zone, which the pink-shaded area right around 0.6735, 0.6710. Historically, and I put these black boxes on the chart to show this area where the market has shown support at the pink zone before. So, on the left-hand side, you see this black box. Support at the pink zone, some congestion around the blue zone and resistance at the green zone. I point that out because if you look at the black box on the right, that’s where we are.
We’re in that same area. So, we’re looking for price action in this area to give us opportunity to trade the NZDUSD. If we’re going to buy it in the direction of our current momentum and trend, then we’re looking for buys on dips to support or breaks through resistance. A couple other things that I point out here. These two blue trend lines. Kind of hard to see because it parallels right along this pink-shaded area, but there’s two blue trend lines recognizing the support at the pink zone over here on the left, but also resistance here in the middle and now looking at support on the right.
So, somewhat similar to a head and shoulders style pattern, where we see support, resistance, support between those double blue lines there. Kind of a diagonal support-resistance level if you will here on the chart. So, very interesting there. Of course a break higher looks for the continuation of the rising trend. Really it would only be a break of that pink zone, the black trend line, rising black trend line that I would suspect we’re looking for this to turn around and go back down.
Let’s zoom it in a little bit. I want to point out these double red lines here as well. Look at what’s been happening over the past couple of weeks. Just a simple little bit of pullback. Fall down here as it falls between these channel lines, these falling retracement lines, or maybe even somewhat like a flag pattern. But falling back down again, challenging the blue zone at the top. 0.6800 is the top of that. 0.6800. Top of the blue zone.
So, what we would expect to see today is if the uptrend is going to continue, we’re either looking for a pullback to the pink zone. That would be the bottom of this falling little channel, or we’re looking for the break above the blue zone. Breakout scenario would be above 0.6800. We do have some news for the US today that may impact this currency pair as well. GDP data popping up at 8:30AM Eastern US time. Just about – what – 35 or so minutes from the recording of this video. We have some New Zealand news later today. ANZ business confidence coming up at 7PM Eastern US time later today.
So, we know that there’s some potential impact on news. So, what we’re looking for with that is the trade setups to happen. In this case, a push above the blue zone targets the green zone. Above the green zone targets higher levels in the direction of our current trend and momentum. When I say that, I’m talking about the long-term. Not just this little red channel here, but the longer-term bullish trend and momentum.
So, buying the pink zone or above the blue zone is really effort I’m looking for here. I have no real interest yet in selling this. Probably won’t have interest in selling this unless it breaks that pink-shaded area and the black trend line.
Let’s take it down to the four-hour timeframe. Just a quick peek here. Look at this. Look at all the resistance we’ve seen into that blue-shaded area again. I don’t think that there’s any doubt that I’m just looking for the breakout above 0.6800. Getting above there, we’ll challenge back to 0.6830, 0.6850, the green-shaded area. And above there, we look for it to go higher. The risk here is that it gets back under the blue zone. The market goes short. Gets under the blue zone, 0.6780.
I suppose if it gets underneath 0.6780, our confidence in a fall back down to the pink zone increases. So, that may give you an intraday opportunity for a short, so keep an eye on that. So, two things I would look for. A sudden infusion of sell orders, getting it back under the blue zone. That may happen if we get positive GDP data out of the US, or really I think for what I’m looking for is the breakout above the blue zone to give it some more bullish behavior for the NZDUSD today.
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