Advertisement
Advertisement

The Best Trading Opportunity Today – NZD/USD – November 26, 2015

By:
James Hyerczyk
Updated: Nov 26, 2015, 03:07 UTC

The NZD/USD closed higher for a second consecutive day on Wednesday, putting the Forex pair in a position to challenge a long-term downtrending angle that

Daily NZD/USD

The NZD/USD closed higher for a second consecutive day on Wednesday, putting the Forex pair in a position to challenge a long-term downtrending angle that has been guiding the market lower since the .6896 main top on October 15.

It’s a highly speculative play since trading conditions are likely to be thin because of the U.S. bank holiday. On the other hand, the absence of a major stopper in the market could help trigger an acceleration to the upside. We’re not looking for the start of a major rally, just a breakout over a long-term angle into perhaps a recent closing price reversal top.

Daily NZD/USD
Daily NZD/USD

The main trend is down according to the daily swing chart. However, the NZD/USD has been building a support base since forming a closing price reversal bottom at .6428 on November 18 and holding inside of a major retracement zone at .6551 to .6470 for several days.

Two consecutive closes over the 50% level at .6551 could be signaling the presence of buyers. This move could also be creating the upside momentum the market needs to take out the resistance angle at .6596.

A sustained move over .6596 will signal the presence of buyers. This could spike the market into the closing price reversal top at .6604. Taking out this level could lead to a further acceleration into the main 50% level at .6662.

Watch the price action and read the order flow on a test of the downtrending angle at .6596. Trader reaction to this angle will set the tone for the day. It will also tell us whether momentum is shifting back to the upside and if investor sentiment is doing the same.

Buyers have to be aware that this is a pure momentum play and will work best if back by strong volume. If the volume isn’t there then the move is likely to fail. Nonetheless, the reward/risk on the trade is good if you don’t turn this into a long-term play if wrong. 

About the Author

James is a Florida-based technical analyst, market researcher, educator and trader with 35+ years of experience. He is an expert in the area of patterns, price and time analysis as it applies to futures, Forex, and stocks.

Did you find this article useful?

Advertisement