DonaldDuck
Short

Position/Swing/Day Strategy for NZD/CAD Breakout

FX:NZDCAD   New Zealand Dollar/Canadian Dollar
226 2 2
The NZD/USD             has come down from its all time high of 0.96600 recorded on 2014 March 20, only to rally back up one year later and test the 0.9600 line on 2015 March 23.

You will notice the Fibonacci line I have Drawn from 2014 March High's to 2015 June's lows. This shows further support and resistance , further surmounted by Supply and Demand Zones 1, 2 and 3.

A trend based extension has been drawn using the second downward leg as its foundation. Of course the first downward leg is observed at the retest of the 0.9600 area on 2015 March 23.

How to trade this set up

A short position could be taken if Supply and Demand Zone #2 offers significant price rejection from our recent full bodied daily candle close. This area has rejected price 4 times prior to our Full Bodied Candle Close. This could be the start of our third downward leg.

A long position could be taken, if we accumulate relative strength in Supply and Demand Zone #2, moving the price above the 0.8720 zone, offering strong resistance and clear candle rejections for the bears. This would present an opportunity for a further corrective wave, which may drive price up to the 0.38, 0.5, 0.61 retracement lines.

Trade Styles

A short term trader may look to short on the 0.8690 line with a TP at 0.8660, and a TP2 at 0.8630. Also to buy if we break above, buying on the 0.8715 line with a TP1 of 0.8740 and TP2 0.8780. Keep stop losses tight.

A Swing Trader may take a short opportunity around the 0.8690 line with a TP1 at 0.8560, TP2 at 0.84000 ( Supply and Demand Zone #3) Also if price action breaks Supply and Demand Zone #2, driving up to test our Fib Lines. At this point taking short positions on the Fib Lines and profiting from short term resistance. With TP1/2 midway down to the previous line, and Stop Losses shortly above the fib line.

A Position Trader may look to open a Short Position now. With TP1 on the 1 Extension and TP2 on the 1.618 Extension . Also If price clearly breaks through Supply and Demand Zone #2, Open a long position while still holding your initial short. As price moves above Supply and Demand Zone #2, be prepared to place short positions on fib lines 0.38 0.5 0.61, while holding the initial long as a hedge to balance your initial short, until returning down to the 0.8700 line with profits from fib line resistance. Then following through with the Short Plan.


If you like my idea do not forget to like it, and please post a comment below and or sharing your idea and thoughts.

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