If you’re a follower of my work on YouTube then you know that this week I wanted to try something new. I wanted to introduce something I’m calling Chart of the Week where, you guys shoot me a question about a chart that is giving you problems and I show you what I see and talk about how I would look to trade it.
This week I chose to take a look at the EURNZD on the higher timeframes. When asking me to check out this chart the trader wrote in “To me it just looks like a mess with the consolidation and huge wicks {from} October through November… I would agree 100% this chart is nasty and that’s kind of what I like about it. To me the chart is filled with consolidation, meaning the market isn’t giving us a clear direction of which way it wants to move. In fact as I ventured from timeframe to timeframe in order to try and get a perspective on things I found myself flip flopping over which direction the underlying trend was in. With what being said when I looked on the 4 hour chart which is what the trader requested the first thing that popped out to me was the potential for a 26-18 trade. The problem was, it looked to be against the current trend which would significantly hurt its chances of completing and rolling over in my favor. I then thought about a potential pull back into previous structure, but because of the consolidation above, I didn’t like the chances of getting a market expansion. Darn this consolidation, ruins everything! Wait that’s it! Consolidation! That’s what I expect the market to do.
With price action sandwiched between two levels of structure, I think we will retest the previous structure highs and then consolidate between the support and resistance zones until the eventual breakout occurs. What’s good about consolidation is this. A) Advanced patterns form on the lower timeframes and B) its pretty easy to predict targets since obvious structure exist. In the case of the EURNZD we have a range of well over 100pips so there’s plenty of opportunity available.
As always you can view the video for tis post on my YouTube Channel and view the chart on the Trading View website.
Nice, I'm assuming you got in that our previous pullback. If so that's excellent man. Best of luck with those targets, I think we'll test those highs, unless we get some horrible news reactions tomorrow.
HamedAghajani
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Thanks Akil. Yes. my Entry was 1.5950, sl 1.5830. Lets see how this trade, plays out.