Bad news on dairy auction will send this pair upwards. Recent data surprised to the downside, not so much based on direction, but out-of-proportion depth relative to prior upward trend of negative data. Revenue for NZD are commodity-heavy, and dairy represents a major source from its Asian theater importing partners.
Keep an eye on this FUNDAMENTALLY-driven pair.
Regarding the counter-force in EUR, refer to recent USDollar chart where I posted an extreme target. Price hit, meandered and rolled from there. Hence, strengthening in the EUR will probably be reflexive to USD softening.
David Alcindor
4xForecaster
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10 DEC 2014 - Update:
From Tiwtter:
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EURNZD nears forecast high-prob reversal level at 1.58180:
Thank you very much for your insights its been very helpful.
Just wished to clarify where would stops be placed ? Below the entire "Bullish Entrenchment" @ 1.57065 ? or would a breach and close into the "Bullish Entrenchment" be enough reason to warrant an exit of the trade ?
Once again thank you
-XN
4xForecaster
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Hello @cxn1991- I do not offer any trading advice on SL placement, as this can only be defined based on a variety of factors that define and distinguish each traders from one another. Only your risk tolerance, leverage, defined risk percentage can define this.
The structural definitions within most analyses are simply to point out where bears/bulls will fight the fiercest, or where a R/S level is to be expected.
If you trade a very large account with a low RR, I'd say to enter as of the release of the signal. I trade based on my model, given the structures defined in the analysis, but this might represent too wide an exposure to more conservative traders out there.
So, i apologize for appearing so evasive whenever I receive this request, but I don't really have a good recommendation for reasons stated above.
Now, here is a good rule of thumb: I would turn to Fibonacci levels, and look at all prior price swings within the same timeframe as the one you intend to trade. If the price swings have been followed by a similar 0.618 retracement, then I would put my SL at 0.786 9in fact, slight ahead of it, so that my order is taken).
If instead, most price swings have been followed by a deeper retracement, say 0.786 or 0886, then place the SL at the next level (100 would represent the next level to 0.886), but slightly ahead, so that of that next level.
There are other ways to gauge price action. For instance, some pairs are consistent with extensions, such as 1.272, 1.313, or even 1.414 (rarely 1.618, since they are most anticipated). Here too, the SL would need to be placed accordingly.
Note also that, besides the SL, a ENTRY order can also be left floating right at the anticipated Fibonacci level. However, I would make a habit to define your SL and place it in the chart always before defining the entry. TP should only be defined and placed last. This ensures a good safety habit, and a psychology that remains open to the aleatories of the market and tolerant to well-anticipated losses.
David Alcindor
CHENGXN
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Dear David,
Thank you very much for the advice, much appreciated !
Price declined, but remained above the forecast "Bullish Entrenchment". Forecast to TG-1 and TG-Hi remain in force.
David Alcindor