We decided to sell NZD/USD already. But, what indicators are signalling to us to sell?
How many reasons do you see on this chart for going short?
- For starters, since Wednesday when the Reserve Bank of New Zealand delivered some hawkish comments, this pair looks fundamentally bearish.
- The trend has been down over the last two weeks and there has only been one-way traffic during this time
- This morning´s move higher is just a retrace of the 2-week downtrend
- We´re below the 50 SMA (yellow) on the H1 chart which is supposed to provide some resistance in case we move higher
- The last 3 hourly candlesticks have formed 3 dojis, which are reversing indicators after an uptrend or after a retrace
- The stochastic indicator is overbought in the same time frame chart
Seven indicators pointing down should be enough for a forex trade to be successful. You can't know for sure how a trade will evolve when you trade forex, but these indicators are more than enough to open a trade. Now let´s see if the market agrees with our analysis.