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I’m going to get started today on the New Zealand Dollar versus the US Dollar [NZDUSD]. Starting here on the Daily Chart, long-term we could see that this currency pair has been in an uptrend. We go all the way back down to the bottom left-hand side of the chart, in August of 2013, so almost a year ago. We started this uptrend. Bottom left. We came down. Quite a long time came down. Made a new low here, which became the middle point of that trend line, started rising again, made a new higher high, and now we’re coming back down. Over the past several weeks, we’ve been coming back down.
Interesting though, over the past several weeks, in the Trade Room, we’ve been studying this red box, where several times, several days during this time period, it came down and challenged support into this bottom of this red box and into this yellow-shaded area, right around the low-0.8500-level. 0.8525, 0.8530 or so, down towards the 0.8500-level. Found support here, support here, support here, and right now we’re underneath those supports. So, I think that might be very significant for the day today.
So, let’s go ahead and zoom in on this area, this red box here and this yellow-shaded area. Again, there’s your supports back along this yellow-shaded area. I’ve even connected the lows within that yellow-shaded area at the bottom of that red box. Connected those lows with a blue trend line here, and we could see that the market is now coming back up to challenge that blue trend line and those historical supports as resistance.
So, very significant today is this yellow-shaded area. As long as it holds within or underneath it, there could definitely be resistance and the possibility of this turning back around. And really, the only reason we would expect it to continue to pressure higher would be that it breaks through this 0.8535 or so level and continues to pressure higher, breaking through these supports that are now acting as resistance. And as technical traders, of course we know that historical support helps us identify future resistance. And specifically between the 0.8515 and 0.8535-level, this yellow-shaded area, we’ve seen quite a bit of support and now that’s acting as our intraday resistance.
Trend bar for the Forex Black Book is red, which also gives us a little bearish bias, so we were kind of looking for some uptick here. We were looking for the buyers to take short-term control. We’re looking now for resistance and the sellers to take back control and new selling opportunities with the Forex Black Book indicator.
One thing I want to do here on the Daily Chart. Let’s take Fibonacci from the highest high, all the way at the top of the chart, down to the most recent and current low. And let’s get it right on that low. See if I can get it there. And the .382 Fibonacci retracement level of that downtrend leg sits right at 0.8545. That’s the top of that yellow-shaded area. 0.8545. Just above it. So, we have the Fibonacci, .382 Fibonacci. We have these historical supports along the top of that yellow-shaded area. We have this blue trend line representing historical lows and now resistance here.
So, a lot of information right here, telling me that as long as it stays within or underneath this area right here, I would look for resistance, clues to reversal, and selling opportunities to go back down in the direction of our most recent momentum, targeting back down to this orange-shaded area or possibly even all the way down to the most recent low into this purple-shaded area. And the only reason we would change our perspective is if it does take a push back above, we’ll call it, 0.8535. That would be the breakout point for it to continue to pressure higher, and then, of course, we’d look for it back to the green or the pink, or possibly even back into the blue zone at the very top of this red box. But for right now, staying under the box, under the yellow zone, concentrating efforts on the sell side today.
Take it down to the 4-Hour Chart, you can see all of that same information. There, again, are historical supports inside that yellow-shaded area, top of the yellow box. There’s the blue trend line that we were just looking at. So, nothing really changes here. We just know that we can see a little bit of more detail, and we could even look for that breakout. If it gets an open and close above 0.8535 here on the 4-Hour, of course that would give us confidence it’s going to start pushing back towards the green zone or possibly even as high as this pink-shaded area up here at the top. Of course the .382 fib at 0.8545 also providing a clue to resistance.
Again, getting underneath this yellow-shaded area, probably back underneath 0.8515, we’ll look for it to begin pressuring back down, possibly to the orange zone or maybe even into the blue-shaded area. We don’t yet have a new arrow. Yellow or red arrow with the Forex Black Book. That’s the red trend bar at the bottom. You could look over here. You see yellow arrows at the top of the trend. If I move it over a little bit. You could see, if I move it over a little bit, there’s the red arrows at the top of the trend. It went up, you got a red arrow, and then it started going down, went up, got a red arrow, and started going down.
So, if you take a look at those clues, it went up, red arrow, and then started going back down. It went into congestion. Yellow arrows started going down. If you start to see a new red or yellow arrow now, into this yellow-shaded area and into this resistance, of course that would give you a higher amount of confidence that it’s going to go down.
Now, of course, in about 40 to 45 minutes from the recording of this video, we do have a couple of pieces of data that will likely influence all of the US pairs. That will be non-foreign payrolls. US non-foreign payrolls, and of course we also have Canadian employment data coming out at the same time. So, those two pieces of data at the same time could definitely affect many US pairs that we’re going to be talking about today, so keep an eye out for that, especially here on the NZDUSD. This yellow-shaded area will be your main area of focus. Within or below it, I’m looking for it to go back down. If it breaks above this yellow-shaded area, I’ll look for it to target back to the green or the pink-shaded area, but the overall focus right now is for selling on the NZDUSD.
