The NZD/USD Retraces to Support
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
(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.
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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