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The NZD/USD Retraces to Support

Walker England

DailyFX.com -

Market Condition: NZD/USD Bullish Retracement

Target 1: 50% Retracement .6801

Target 2: 100% Retracement .6883

Invalidation: Breakout Under Support at .6719

NZDUSD 4Hour Chart

The NZD/USD Retraces to Support
The NZD/USD Retraces to Support

(Created using Marketscope 2.0 Charts)

The NZD/USD has fallen as much as 116 pips today to test a line of rising trendline support. This line, as depicted above, has been formed by connecting the November 18 low at .6248 with the December 9 low at .6571. By extrapolating this line, we can see the NZD/USD testing support near today’s low of .6719. If prices bounce from this point, it can allow trend traders an opportunity to enter into the market on a retracement. Potential bullish targets include .6801, which represents a 50% retracement from the December 2015 high at .6883.

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In the event that prices fall through support, the trendline drawn above would be considered invalidated. This would suggest that price is set to retrace further, or even develop a new bearish trend. In this scenario, any existing bullish positions should be concluded and trend traders may begin to consider bearish opportunities when trading the NZD/USD

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original source

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