This week i've been paying close attention to absolute correlated and negative correlated pairs. In my previous analysis on GBPNZD we were looking for a Long Opportunity so it's only logical to look for the same in this pair. Here I see a Triangle formed so what I understand from this data is price is respecting its support and pushing lower highs leading price to its squeeze. The closer price gets to the end of the squeeze the better, I have a long shot bias in this pair because fundamentally we do have a depreciation in currency for both the Aussie Dollar and New Zealand Dollar. Calculating Targets if placing a buy stop a few pips over the probable descending trend line breakout, we collect the pips from the initial impulsive move before price began squeezing and that's how we calculate our potential target, stop loss would be a few pips below support/ daily ascending trend line. This is a great idea for optimal risk to reward.
What invalidates this trade? price breaking below support or breaking the ascending trend line (lower lows) we could then find a short opportunity using the Fibonacci tool at the breakout.
What invalidates this trade? price breaking below support or breaking the ascending trend line (lower lows) we could then find a short opportunity using the Fibonacci tool at the breakout.