Equity markets under pressure as presidential debate has the world scratching their heads on what unfolded. We can expect money flowing back into the DXY for safety which will weaken all denominated pairs like NZD/USD.

NZD/USD

The daily chart is now consolidating below the multi-month trend line break where we can expect some further downside pressure to 0.65000. In the short – term, NZD/USD has the 50 EMA to break for confirmation.

NZD/USD

 

Key Points:

  • Price holding below the 200 EMA
  • Price hugging above the 50 EMA
  • Daily – Trend line break and consolidation as a flag for continuation downside.
  • RSI has crossed below the 50 mid-point
  • Watching price at the next 1-hour trend line for a bounce or break. If enter as supporting entry, moving the stop to break even could be a wise move if a strong bounce occurs.

 

Key Levels:

Support – 50 EMA, 0.65400, 0.65110

Resistance – 0.65910, 0.66035, 0.66120

 

Entry Zone:

Optimal entry provides the greatest reward to risk ratio while supporting entry is a zone for reversal signals.

Optimal Entry – 0.65880

Supporting Entry – 0.65785

 

Candle Reversals for entry

  • Bearish Shooting Star
  • Bearish Engulfing
  • Bearish Dark Cloud Cover Bearish Candlesticks

 

The Risk:

As traders, it is your job to mitigate the risk and only trade structures that provide high probability and great reward to risk ratios.

If you are not comfortable with defined exit levels, experiment with Moving Averages to help set solid exit rules to protect your capital.

 

IF: Price breaks above 0.66035 level and violates 200 EMA– this would suggest the structure is not in our favour and would be wise to reduce exposure or close the trade until a solid signal gives us reasons to re-enter.

 

Reward / Reward Targets:

Optimal Entry 0.65880 – Target 1 0.65400 = 3x Reward to Risk

Optimal Entry 0.65880 – Target 2 0.65110 = 5x Reward to Risk

Supporting Entry 0.65785 – Target 1 0.65400 = 1.6x Reward to Risk

Supporting Entry 0.65785 – Target 2 0.65110 = 3x Reward to Risk