Monday 12 June 2017

NZD/USD Is Forming Contradicting Signals





Occasionally the signals one sees on the different time-frames can contradict each other quite strongly, as is the case with NZD/USD right now. The pair has been moving to the upside for a month now, until it finally reached a resistance at 0.7220, formed a very telling hanging man candlestick both on the daily time-frame and the four-hour time-frame and started falling. However, NZD/USD also formed a hammer candlestick at 0.7170 and its move to the downside is clearly interrupted. Usually in a situation like this I tend to rely more on the signal I see on the larger time-frame, in this case the hanging man candlestick on the daily time-frame. That said, the signal on the four-hour time-frame indicates that the pair might form a double top, which would only confirm the aforementioned signal for a move to the downside.

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