Just a semi mid-week update. This post doesn't just pertain to the NZDUSD pair but as many of you know I'm a technical trader. Adding speculation into my thought process about whether fundamental news will be good or bad and how it will be perceived and who will buy/sell as a result of that is just not something that interests me. I prefer to look at the bigger picture and see where the buying and selling is happening, and almost always this places you on the correct side for those shocking moves.
NZDUSD after breaking well below a crucial support has been able to maintain itself underneath that support which is a good thing if we're expecting that continuation further. It appears to be forming a which gives technical traders our second look at measured objectives to expect to hit over the duration of this opportunity. The first look that we got with this was actually from applying basic principles connecting two lows to see market strength on a very high time frame.
Look at the first and second together on the daily:
Remarkable where that puts us. The measured move that has been recently calculated ends exactly where the support is.
Is this outcome 100% certain? Of course not, but we as intelligent traders know that, anything is possible. Trading is about calculating risk. By my calculations, over the course of the next day to week or two NZDUSD should find itself in the .65000 area.
I mentioned this was not just about NZDUSD ....I'll bring a quick discussion to EURUSD and GBPUSD . EURUSD has had a similar break to strength that NZDUSD has had and has also been consolidating over the last couple of days to move lower. GBPUSD on the other hand has almost done the complete opposite. It confirmed an pattern, retested the neck (providing the best buying opportunity) and last but certainly not least, at the end of Tuesday's trading candle it closed outside of the strength from the rally that broke the neckline. All signs on GBPUSD point up, while most signs on EURUSD and NZDUSD point down. This of course highly supports my view on GBPNZD as well, which is not a short term trade.
Take it with a grain of salt, but if I were to forecast anything for the rest of this trading week and beyond, not necessarily 100% tied to FOMC, it would be Dollar Strength (aka EURUSD , NZDUSD down/bearish) with the exception of GBPUSD .
Feel free to add to the discussion or share your own thoughts about this post.