NZD/USD Gapped Lower On Geo-Political Risks - Forex Anatomy

NZD/USD Gapped Lower On Geo-Political Risks

There may be a potential sell opportunity forming on the NZD/USD.

The kiwi versus the buck (NZD/USD) gapped lower at the start of this week’s trading due to a combination of geo-political risks over the weekend. Weekend events initiated risk averse price action at the weekly open, as investors remain uncertain about the extent of any response over the drone attack on Saudi Arabia’s largest crude-processing facility in Abqaiq. This will cause high-beta currencies, like the Aussie (AUD) & Kiwi (NZD) to react quickly to avoid risk.
 
On the 4 hour chart of NZD/USD, we have a zone of 4 hour structure resistance (0.6440/0.6480), that provided sufficient supply to complete the 4 hour double top at the market’s open.

At the time of this writing, the NZD/USD appears to want to bounce higher after tumbling to a low of 0.6368, where it has found intra-day support. This may provide a new opportunity to re-enter a trade that will allow you to short kiwi over the US dollar, if it corrects to 0.6397/0.6415 zone and markets remain risk averse.

Both of the moving averages (20-period, 100-period) are preparing to slope lower, which indicates more downside for the NZD/USD currency pair. If price retraces to the 0.6397/0.6415 zone, then look to short NZD/USD on bearish confirmation.

 

A potential stop loss order at 15 to 20 pips from entry price, with a target or take profit order of +37 pips.
(Details & guidance on how to execute this particular trade setup is only reserved for our premium-members. To read more about our private trading community called, “The Lab”, please click here. )

 

 


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About the Author Marvin Perry

Marvin Perry has been an active trader within the Forex market since 2010. He attended the University of Illinois in Urbana/Champaign, and graduated in 2002 with a double major in Cell and Structural Biology and Chemistry. He currently serves as an FX instructor & Quantitative Analyst for the Forex Anatomy Private Trading Community called "The Lab", where he conducts live weekly trading webinars & instruction on Fundamental Analysis & Inter-Market Interpretations of dynamic asset classes and their influence on currencies.

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