NZD/USD may not be the most popular forex trading pair but the bounce on the support level looks promising. New Zealand dollar ranges between 0.81 and 0.83 US dollar in the last 30 days with quite a few bounces off the support and resistance levels. However NZD/USD has been traded down to 0.73 back in November, when a gap up followed by a 100% pullback ignited a 3-month uptrend with minor retracements. The foreign exchange pair has entered a consolidation stage in March and has remained inside the sideways channel for 45 days. Until a breakout or breakdown occurs, buying at support and selling at resistance should be the best trading strategy, as long tight stops are set.
NZD/USD daily forex chart provides the necessary information regarding important price levels but it’s the hourly graph that leads to better entry point. At 8125 points there has been a reversal candlestick pattern, 2 doji’s and another verification inbetween for a total of 3 bounces. Lagging indicators can’t be much of a help during the consolidation phase, since they are closing down to their median values. But traders don’t really need more forex signals apart from pinpointing the support and resistance levels of the trending channel under these conditions. If you decide to buy NZD nowadays, a likely profit target should be the resistance level at 8250 (round number) for an 125 pips profit.
Investing in the New Zealand dollar is a personal first, as I usually trade Euro, Yen or the Pound. I couldn’t ignore though the high reward-risk potential of the NZD/USD trade.
Disclaimer: I’m long NZD/USD.
