NZD/USD Finally Reverses at the 50 SMA

NZD/USD has been retracing higher this week, but the retrace is complete and the price is reversing back down now

Skerdian Meta•Thursday, April 11, 2019•1 min read

Earlier this week we went long on NZD/USD as this pair was retracing higher. The trend has been pretty bearish for the last three weeks, but the price was retracing higher, so we decided to enter short with the main trend. We based that trade on the H1 chart which was overbought, but now it’s apparent that most traders were trading the H4 time-frame.

The retrace wasn’t complete on this chart when we opened the sell signal, and the retrace stretched further to the upside. But, we reached the 50 SMA (yellow) yesterday on the H4 time-frame, which has been providing solid resistance in the last few session.

The stochastic indicator became overbought yesterday which meant that the pullback higher was complete and today the reverse lower is taking place as USD bulls regroup again. The price also formed three doji candlesticks on this chart which also pointed to a bearish reversal. Now we are in profit with our signal, so we are holding on to this trade since there’s more room for further profit to the downside.

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ABOUT THE AUTHOR See More

Skerdian Meta

Lead Analyst

Skerdian Meta Lead Analyst. Skerdian is a professional Forex trader and a market analyst. He has been actively engaged in market analysis for the past 11 years. Before becoming our head analyst, Skerdian served as a trader and market analyst in Saxo Bank's local branch, Aksioner. Skerdian specialized in experimenting with developing models and hands-on trading. Skerdian has a masters degree in finance and investment.