Despite falling sharply from an early-August high of 0.8850, more recently the NZDUSD is showing signs of rotating higher.
Among the strategies that are taught in our workshops, one is based on the concept of a value zone.
This strategy incorporates the 100-, 150- and 200- day EMAs, with these moving averages defining the value zone.
As can be seen on the chart, recently the price action pushed into the value zone where it was met with strong buying interest around 0.8100.
Subsequently, the currency pair broke through the upper boundary of the zone, creating a buying signal in the process.
The move highlights the bears’ inability to maintain lower prices and points to bullish momentum in the very short-term.
As such, aggressive traders may consider placing on stop buy orders above 0.8400, looking to catch the extension higher.
If longs are considered, stops will be placed below 0.8050.