Last week open did not yield sufficient evidence to initiate a position in NZDUSD. Mid-week, price action moved higher from trend line support as risk appetite returned to the market. Mid-week, price action formed a Hanging Man candlestick marking a reversal back to the downside.
This week, NZDUSD finds itself at the familiar upward-sloping trend line established in August of last year. Should downside be contained here, we expect New Zealand Dollar bulls to retake momentum and drive the pair upward to the March high at 0.8067. Alternatively, a break and close below the trend line would signal substantial NZDUSD losses in the coming weeks.
NZD/USD Strategy
1. Long NZDUSD on a confirmed reversal at 0.7850 along the upward sloping trend line.
2. Set stop loss at 0.7773, just under the wick low of the most recent trend line test.
3. Set target at 0.8067 near the March top, risking 77 pips to gain 217.
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