A New NZD/USD Signal
Skerdian Meta • 2 min read
As e mentioned it earlier on, we lost our AUD/USD sell signal last night during that EUR/USD short squeeze, which pulled all the forex majors up against the Buck. But we opened another sell signal in NZD/USD near the top and it hit the take profit target overnight.
Now, we opened another forex signal in the same forex pair, this time in the opposite direction. You might ask what the reasons were for this signal. Well, here´s the logic behind this forex trade:
Trend – We know that going with the trend is the first basic lesson you learn when you enter this business. This is the only major forex pair which has been in an uptrend for about a week, going against the USD. So, we´re in line with the trend here.
Resilience – After last night´s short squeeze, all pairs went through a several hour pullback period. While other forex pairs retraced 100-150 pips, NZD/USD only retraced 35 pips, which meant that unlike in other pairs, the NZD buyers weren´t going to give up their gains and once the USD retrace was over they´d be back hungry for more. If something doesn´t go down, it will surely go up.
The technical analysis clearly points up
Technical analysis – As you can see from the forex chart above, most of our technical criteria are met. The stochastic indicator is oversold and heading up, the RSI indicator got close to the oversold area and is heading up too, while a couple of moving averages are providing support below.
The 50 SMA in yellow in particular is a technical indicator we can rely on. It has provided resistance and then support many times this week. No one will ever know for sure if a forex trade will work or not, but these are the indicators we base our trades on and they´re pointing up now, so fingers crossed guys.