NZD/HKD Could Move Higher
Frano Grgić | Nov 23, 2021 04:21AM ET
The NZD/HKD pair has formed a bullish bat pattern which has several good trading signals pointing that the price could move up. The pair is currently in the uptrend channel, where we have higher lows and higher highs.
That is visible on the chart where trend lines are connecting those levels. The price has broken below previous support at 5.49320, where we have a bearish pin bar formed on the retrace. The pin bar formed as a confirmation that the previous support is not acting as a resistance.
The price is in the short-term bearish mode and now is reaching a support level where we could see the price reverse. From there, the price moved down, and now it is close to support at 5.39272. This is the support that will have an impact on the price like in the previous attempt in July this year.
Support at 5.39727 is a confluence of support where the uptrend line and horizontal support represents support for the price. We could see the price reaching a support level and then forming a bullish pattern indicating a bullish reversal.
At this point, it is good to wait until the price reaches support and form a bullish price action signal in the potential reversal zone marked with a grey rectangle. Stop loss is below previous lows you can see in the past, and it is close to the next support at 5.31456. That gives good insight where the price could not reach lower levels which could happen again.
The first profit target is at 5.48670, which is close to the first resistance level. This makes the target reachable because the price in the past did not have any problems reaching it. The second profit target is at 5.53450, which is below the second resistance level, and if the price manages to break the first resistance, this level will not be hard to reach.
This trading signal has a 3:68 Risk to reward ratio, making it a good trading opportunity.
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