This pair was on my watch list since the beginning of May. The pair has been in a long downtrend since October 2014. On May the pair showed a strong up move that sent prices to close above the DAILY 200 moving average and to close above the January 2015 resistance (ex-Wave 2) which changed our bias on this pair to . Jumping into the market at that point was very risky as prices might have fallen below the 200 DMA, which did happen at the formation of wave 2. Prices breached the 200DMA by 2 small red candles which was fine, but wasn't the right time to trigger the trade so we decided to stand aside with patience to find the right set up. Fortunately, those red candles were only forming a retracement that found support at 1.05 and prices found their way back to breach the 200 DMA again and create a candle that breaks the top close of Wave (1) at 1.0824. This candle had a tick that established a strong resistance at 1.09108.
LAST POST (4th of June, 2015)
Prices pushed found a small retracement that we found to be the perfect timing to ride the momentum. I posted to buy at 1.07881 and to target first profit at Wave 3 resistance of 1.10 and second profit at Wave (5) @ 1.13
After the announcement of the RBNZ rate cut we saw a strong green candle to closed out our first target profit with additional +200 pips. since wave (3) is usually the longest wave, prices might reach wave (5) without retracing and this would cause wave (5) to be wave (3). We will be looking to add further positions.
We are currently trading above the 200 DMA. When prices trade above the 200 DMA we always have a bias.
Prices broke out key resistance areas which might send us to higher round numbers in the future.
Fundametally the RBNZ cut rates yesterday, which will rebel investors from holding kiwi bank notes.