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I’m getting started today on the New Zealand Dollar versus the US Dollar [NZDUSD]. I’m going to start all the way out on the Weekly Chart and get a longer-term viewpoint of this currency pair. We’re looking all the way back into 2005 on the left-hand side of the chart. And since 2005, the highest peak high that we’ve seen here on the chart is back in July of 2011. That’s this little blue circle up here at the top of the chart, and I put a horizontal, red line up there close to that high, which sits right around the 0.8800-level.
Then the next high, the next lower high that we see is also circled in blue here, and that’s back into April of 2013. A little bit more than a year ago. So we see our last two highs since 2005. Those will be important. I’ve placed two horizontal, red lines at each one of those highs, where those blue circles are so we can see where they are as we begin to zoom in to this chart.
So, let’s zoom in one time. You could see where they are here and the red lines associated with those two highs, and most importantly, take a look at where today’s current highs are. The most recent highs that we’ve seen are also right around that lower red horizontal line. This is the Weekly Chart, so several weeks now finding resistance around that lower red line. And we haven’t quite reached all the way up to the 0.8800-level here for the NZDUSD.
Let’s now go ahead and take all of that information down to the Daily Chart, and here’s our current timeframe. And you could see, over the past several weeks, we’re now looking at this range, this red box up here, going from March 13 of this year to current present time. I have this red box highlighting where we’ve seen most of our resistance. And I say most of the resistance because we’ve seen a couple of times where the market has spiked all the way up here into the low to mid-0.8700s. However, we have not seen a clear daily candle, one single candle body open and close above the 0.8700-level. That’s the top of that red box that we’re seeing here.
Let’s go ahead and zoom in one more time so we could see this a little bit closer, and what I mean by that: there’s our red box. There’s the orange-shaded zone at the very top of that red box. And there has not been a clear single candle body open and close. We have had one close. The blue candle closed above. The red candle opened and then closed right back below. Same thing happened over here. So, until we see a clear candle body open and close above 0.8690, 0.8700, there’s still potential resistance here at the top of the range and the top of this resistance that’s been here since – well, the lower red line, last year, 2013, but the top red line all the way from 2011. These are historic resistance highs.
So, let’s go ahead and just outline this. We’re challenging the resistance now. Let’s go ahead and put a couple arrows here. As long as we stay within or underneath this orange-shaded area, I haven’t highlighted between 0.8670 and 0.8690, but particularly anything below 0.8700, as long as it stays underneath there, there’s potential resistance and reversal, just like what we’ve seen going all the way back into March of this year.
If, at any time, which we have not see yet this year, we see a clear, single, daily candle open and close above 0.8690, 0.8700, above that orange-shaded area, we look for a continuation higher, a challenge of the current highs into 0.8740 or even possibly a push all the way back to 0.8800. And all of this is in the overall direction of the trend, as you could see along with the black trend line there for the NZDUSD.
Now, I know, over the past several weeks, we have seen the trend bar being red for the Forex Black Book. That symbolizes the fact that we’re in a period of congestion or ranging here. We haven’t seen upward mobility. We haven’t seen downward mobility. Just bouncing back and forth over the past several weeks, so that’s why it’s turned red. If we see a breakout above 0.8700, above the orange-shaded area, red box, and a continuation higher, likely we see this turn green. If it turns back around, breaks under the black trend line, we see a continuation lower, we’ll likely see it stay red and a continuation of the downtrend.
Let’s go ahead and put a couple more arrows here. Of course we’ve done this over the past few days. Down here at the bottom of the range, the bottom of the red box would be our, of course, support. And a breakout underneath the bottom of that red box, the yellow-shaded area, we’ll look for a continuation of the downtrend. Keep in mind what an uptrend and downtrend definition is. Uptrend: higher highs and higher lows. We could see the higher lows along the black trend line. If it’s going to stay in an uptrend, what do we need to see next? A new higher high, which would likely challenge all the way back to 0.8800 and the top red line. But again, first, to see that we need a breakout above this orange-shaded area.
And then question of course today will be: are we going to have enough momentum to break through that orange-shaded area? Let’s go ahead and take it down to the 4-Hour Chart. Now, yesterday, I also highlighted the pink-shaded area. Let me bring these arrows a little bit closer, back to the current market. These two arrows here. The orange-shaded area. We’ve already discussed that as our current intraday resistance. The pink-shaded area was, of course, yesterday highlighted as potential support.
If you bought it on top of the pink-shaded area, if you bought it at – challenged up here towards the orange zone, dipped back to the pink zone. If you bought it in the pink zone, you’re now sitting with profit. You’re cheering on the buyers to break through 0.8690, 0.8700, and a continuation of the uptrend. I would suggest protecting that profit on any buys that you’re in right now. I don’t suggest buying it right now, as long as we sit underneath this orange-shaded area. If you’re looking to buy it, it either needs to break above the orange zone or dip back to the pink zone once again.
On the other side of this, we know that this orange-shaded area has historically been resistance between 0.8670 and 0.8690, so there is potential intraday opportunities here in the orange-shaded area to sell the NZDUSD. Let’s take Fibonacci real quick from the highest high, highest peak high on the chart, down to the current low. High down to low with Fibonacci puts the .382 Fibonacci retracement level right here at 0.8670. That’s the bottom of our orange zone. That’s where our current resistance is.
So, .382 is there. 50% sits at 0.8690. That’s the top of that orange-shaded area. .618 and so forth, the .786 and .886 sit above the orange zone. So, right now is your opportunity, if you’re considering a sell for the NZDUSD, this is it. Right here into the orange zone. Target the pink zone or lower, and a continuation of the downtrend. If you’re looking at the Forex Black Book, the red trend bar, you’re now looking for new red arrows to develop here into this area zone of resistance highlighted in orange. If you see a red arrow pop up, it tells you that momentum may be building back in. That provides a selling opportunity. Otherwise, the open and close breakout above the orange zone invalidates any sells and we’re likely looking for the continuation higher for the NZDUSD today.
