Hi, and welcome to this Blueberry Markets video update with me, John Kibbler, Head Currency Analyst.
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In this video, we’re going to talk about NZD/USD. This hasn’t been on our radar for a while, but there’s an interesting setup that we could look at, and it could go either way. I wanted to do a little bit of analysis to show you what price could do and what we could be looking for in either situation.
Kiwi is pushing into the downside, slightly. But if we look at it from a trend point of view, we are pretty much uptrend. The market is making those higher highs and higher lows. It’s still an alignment to the upside.
At the moment, we’re pushing into this triangle pattern, the market is finding a bit of support at these lows. Essentially, the price is to the upside. We do have a bit of a supporting zone here, where the price is finding that support. If we look left, we can see that the market has found some support and resistance there, recently.
The price is at a point where it could do one or two things: it could break to the upside, maybe these trend lines here. We’ve got this triangle pattern forming, so we could get a breakout to the upside there or we could breakdown to the downside and look for shorting opportunities.
Now, the only reason we’ll look for shorts is if the stock markets were starting to fall. At the moment, the stock markets are still rising. If I go back and take a look at the stock markets, DAX, in particular, is still pushing to the upside. If we look at the DOW, the market is very similar when these triangle patterns are finding a bit of support. Yesterday, bullish candlestick, we could see that momentum continue today.
So, Kiwi is still potentially looking for some upside. The only way we’d look for that downside is if we were to get some bearishness from stock markets because we know that Kiwi’s one of our risk currencies. It doesn’t perform particularly well when the stock market falls but performs pretty great when the stock markets climb.
This area, here, is going to be crucial for us. The market is currently here, finding a bit of support. If it breaks and closes below, we’re looking for short opportunities.
If we go down into that hourly timeframe on the buying side of things, what we could be looking for is a nice little change of cycle. At the moment, everything is still very bearish here, on the hourly, because we’ve got this market pushing to the downside; our trend is pushing lower. It probably looks a bit better on a 15-minute timeframe.
Let me drop it into a 15-minute and you’ll see that trend is very much to the downside on the 15-minute. If we take a look at it from this view, here, the market is making those lower lows and lower highs at the moment, retesting that low, there. If the market drops again, retests this point, bounces, double-bottoms on the 15-minute, and changes that simplicity like we’ve been talking about, the double-bottom patterns, in particular – or even an inverse head and shoulders pattern – that would look like a move up like this, then something like that with a breakout. Any change in cycle pattern here would be interesting to see if we would get that upside. If you see any patterns like this, you could be looking for that long opportunity on Kiwi because the price is technically at this daily level of support. You want to be watching for a potential move back up to the upside. That was the weekly timeframe back up to the upside because the market created this consolidation pattern after coming from an area of bullishness. Typically, you see that breakout to the upside.
So, let’s keep an eye on this, let’s see if the stock markets can push to the downside. If they are, we’re looking for short on this market with the price likely to come back and retest these highs. If the market continues to bounce and we see that change in cycle on the 15-minute for a long opportunity, we’re looking for further upside to Kiwi.
A little bit in the middle of two minds here on Kiwi, but a good little bit of breakdown here and because we’re at that good little area, structure side where we can look to analyse the market.
So, keep an eye on Kiwi. It could be the one to watch and thanks for watching. I’ll catch you soon.
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