NZD/USD Short

4. Feb. 2018

The daily chart is showing a massive daily rejection at the key level of 0.74000, with a huge bearish candle engulfing its previous two days of trading. There have been multiple daily candle rejections at this level dating back over the past two years and even within the past two weeks. The 50 EMA is showing significant deviation from price action indicating that there is room for a pull back to the downside. On the 4 hourly chart price action has broken a long term up-trend trend line and is testing the previous low. A double top has form on this time frame indicating that momentum is being lost. A bearish divergence has formed on the RSI adding confluence to the double top formation. The hourly chart is showing that there is significant support at 0.72925 and potential resistance at 0.73267. Price action could retract to the upside as price action has deviation from the 50 EMA (on the hourly chart) as it progressed to the downside. Therefore price action could retrace up to the nearest point of significant resistance which is the 0.73267 level. I will wait for the pull back before entering a trade and manage the trade once the major lows at 0.72925 has been broken