Wednesday, June 6, 2012

NZDUSD Potential Reversal

NZDUSD has been falling together with its cousin pair, audusd. Could this be a reversal or a retracement of the drastic drop?

Bears saw a two week flattish outlook. From the above chart, we see a nice double bottom. Yet, that would not give us assurance that this pair has indeed reverse. Notice how the past few months, this pair has been on a strong downtrend.

Should this be a reversal, price would have to close above 0.76783. This, would still not give us solid evidence that the trend has reversed. Price would need to retest this level after breaking through.

Looking at the current candle, it seems to be a very strong one. I would await for the retest of the breakout before taking any long positions. It would seem to be a very profitable trade with a positive swap all the way up as well as picking the bottom.

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