I love the structure of the daily EURNZD chart for a short.
The longer term downtrend remains in play, which is my primary consideration for picking any direction.
Then, the more immediate structure has caught my eye.
We see a local high established (1), and price dips lower, creating a new local low (2). Then, making as if the bulls were firmly in control, price rockets up, takes out the previous high and looks like its consolidating up there before the next leg up (3)
Except, that didn't happen did it? No no.
Price fell hard, taking out the most recent swing low position.
And although its hard to see on the daily chart, it looks to be forming an upward sloping channel as a consolidation move, before its next leg lower.
I expect buyers around 1.6300 - 1.6330, but I can't see any risking their necks loading up long positions much before then.
So, the trade:
I'd like to see price close below the channel its forming, probably on the 4-hour chart. This given me a sensible place to put my stop, and hopefully a favourable reward to risk ratio. Targeting 1.6330.
The longer term downtrend remains in play, which is my primary consideration for picking any direction.
Then, the more immediate structure has caught my eye.
We see a local high established (1), and price dips lower, creating a new local low (2). Then, making as if the bulls were firmly in control, price rockets up, takes out the previous high and looks like its consolidating up there before the next leg up (3)
Except, that didn't happen did it? No no.
Price fell hard, taking out the most recent swing low position.
And although its hard to see on the daily chart, it looks to be forming an upward sloping channel as a consolidation move, before its next leg lower.
I expect buyers around 1.6300 - 1.6330, but I can't see any risking their necks loading up long positions much before then.
So, the trade:
I'd like to see price close below the channel its forming, probably on the 4-hour chart. This given me a sensible place to put my stop, and hopefully a favourable reward to risk ratio. Targeting 1.6330.