A classic trading strategy would be placed as shown for a nice 4:1 ratio that meets the bottom channel and fib retracement nicely.
Question is though, can we not say the exact same of an outcome in the opposite direction with the same pattern.....? Consider the immediate resistance around 1.745 area - this is likely the true upper bound level where bears will defend a position with the lower range at 1.622 around with fib confluence and . And how about the larger upward trend?
Flick over to the weekly and you'll spot that a broader cyclical reversal occurred a while back and that we are technically in the early stages of an upward trending cycle.....
Above displayed trade strategy in the daily view would therefore be a counter trend retracement play - which could still very likely play into broader upwards trend in the weekly chart.
But a lot can happen in the medium to long term and event driven risk is VERY high currently. FX always moves to toward economic fair value equilibrium in long term trends and moves, therefore, one would have to imagine or look at the realistic parity of UK against NZ AND take into consideration the discount factor Brexit would have (if it goes through) or multiplier effect (if it goes not go through).... and to balance the other side of the currency pair - what would trade war rhetoric have on the Kiwi.....
Does the uncertainty really warrant swing trading..... or strategies that take hundreds of pips?
The answer? What level of risk can you tolerate and how are you managing you risk?
Increase your exposure when the market proves you right and moves in your favor not the other way.
Always check longer term trends and factor it in your decisions (if it's your style).
Bias has been set and that is net bearish on the Kiwi across all G10 currencies therefore despite personal views of NZ economy, bullish target would be 1.745 level then 1.79