NZDUSD Setting Up for a Potential Downside Move With NZDUSD finally breaking below the demand zone at around .66400-.66200 the market has confirmed that it intends to move lower. Since breaking below this demand zone, price action has found a bit of support at around.65750 and ran up to retest the demand zone. This tells us that the previous support has now turned resistance. I would like to see the market push below .65700 with some good momentum before taking on my short position. If price action can break below this level with some decent momentum we could potentially see a significant downside move. The .65000 even level might give some support because of the psychological aspect of it. However, if price action can break below that level it could signify a move even lower and potentially retest previous structure lows.
Please note the following rules below for entry to the downside:
Price action remaining below .66500
Price action picking up some bearish momentum
Enter on bearish momentum breaking below the .65750 support level, ideally at around .65700
Profit whatever you can get, the initial target is .65000 even as it is a large psychological level and can therefore act as support. As mentioned above, if momentum pushes below there we could potentially see a retest of previous lows.
Stop loss just above the .65000 level
This trade will lose its potential if the first rule becomes no longer applicable. For example if bullish momentum pushes price action substantially above the .65000 level.
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