I come to like FXEmpire’s articles because sometimes they give me food for thought and sometimes their analysis of a Forex pair is in alignment with my analysis and when this happens, I have even more conviction.
Late last week they issued an article about the New Zealand Dollar, here’s a snippet of the article,
The New Zealand Dollar weakened against the U.S. Dollar for most of the session on Friday, before end of the week profit-taking and end of the month position-squaring fueled a late session recovery of most of the earlier loss.
The NZD/USD continued to be pressured by a dismal outlook for the economy after an ANZ Business Confidence survey released earlier in the week showed companies on edge about the future strength of the economy.
The main trend is down according to the daily swing chart. The NZD/USD began its acceleration to the downside last week when the January 20, 2016 main bottom at .6346 was taken out. This old bottom is new resistance.
The NZD/USD isn’t close to changing its trend to up, but due to the prolonged move down in terms of price and time, traders should start watching for a closing price reversal bottom.
I too am looking for a price reversal as price is in a monthly demand zone at 0.63000.
Per my rules, this gives me permission to go long…but I need to see some type of reversal pattern first,
than a pull back into demand on a smaller time frame like the daily chart. But at the moment, I’m not really feeling the price action at this time.
Until I see something compelling showing me price wants to go higher, I’m really just looking for a dead cat bounce, a temporary recovery in share prices after a substantial fall. Because when I pull the chart back even further, this is what I see.
So my plan is to wait to see if price breaches the monthly demand at 0.63000, then short price on a pull back down to 0.5500.
This post is my personal opinion. I’m not a financial advisor, this isn’t financial advise. Do your own research before making investment decisions.