kiwiwalnut

Throw back: Technical patterns has it's uses.....

FX:EURNZD   Euro / New Zealand Dollar
Blatant continuation pattern forming as shown however while we are range bound for now, upside pressure in last 2 or so days would suggest upward break and invalid pattern. That said... technical patterns I feel are manifestations of trading psychology and therefore validated patterns are skewed towards shorter time frame charts - daily charts therefore.....

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 structure support . 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.....




Jun 12
Comment: See it now....?

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?
Jun 12
Comment: As they say, average up - not down.
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).
Jun 14
Comment: latest uptick seems to be kneejerk reaction to NZ PMI release. Funny thing is that I have not encountered many occasions where they would describe a PMI figure as "recessionary".
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
Home Stock Screener Forex Screener Crypto Screener Economic Calendar Shows How It Works Chart Features Pricing House Rules Pine Wizards Moderators Website & Broker Solutions Widgets Charting Solutions Lightweight Charting Library Help Center Refer a friend Feature Request Blog & News Twitter
Profile Profile Settings Account and Billing Refer a friend My Support Tickets Help Center Ideas Published Followers Following Private Messages Chat Sign Out