Last night before hitting the bed, I scanned the charts of forex majors and left a pending signal in NZD/ZSD at 0.7196. Now that I´m checking the forex charts again, I see that the price in this pair has retraced to 0.7190, so a few pips above the low is not a bad place as an entry spot.
The main reason for this forex signal was the immense weakness we have seen in the USD recently, yesterday in particular. I don´t like catching falling knives (not often anyway), so going for the Buck yesterday was like standing in front of a freight train since all major currencies kept taking advantage until the very last minute.
Buying other currencies against the USD was the reasonable thing to do. NZD/USD has moved up alongside other pairs, but during the small retrace, the Kiwi showed the most resilience as it lost the least ground.
The overnight retrace must be over, right?
Now, as you see on the hourly forex chart above, the price has been hanging around the 20 SMA in grey; that whole area is acting as sort of support for this pair.
Besides that, the stochastic indicator is oversold, which increases the odds of an uptrend continuation taking place soon.
The most promising thing for NZD/USD bulls is that the overnight retrace in all major forex pairs has now come to an end as the price has stalled.
That´s supposed to be a negative thing for the Buck, which turns positive for our NZD/USD signal. Now there´s nothing else to do here except sit this out until the forex market decided to move again.
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