Technician
Short

NZDUSD: Presenting A Short Setup

FX:NZDUSD   New Zealand Dollar/U.S. Dollar
1229 22 24
Update: This one failed, major rally following the RBNZ decision.

Bearish shooting star candle following a retest to the broken support of the broken broadening formation, a potential short setup is presenting it self here, i look to short the price near 0.8510 with a first target at 0.8415 and a dynamic second target at the rising trend line for the overall bullish trend . My risk limit would be above 0.8580.

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Trading Criteria:
1. Trades are taken in two units
2. First unit would be closed at first target
3. Stop loss is then moved to break-even
4. Second unit would be closed at second target
5. Note that If 90 percent of first target is reached without triggering entry, trade is cancelled
6. Remember: Losing is a main part of the game ;
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Related Ideas

You've been away for a long time, and out of the charts you posted recently, this is the only one I'm watching, so I have to comment. Considering your targets, I totally agree with this setup, but I want to pay more attention to the longer picture. I have drawn some arrows on the chart
snapshot
and you can see that after each rally above value, price returns to value, and then exceeds it again. Right now this pair is standing at value with an indecision candle, and if your chart plays out (and I'm saying again, I think you are right) it may create a fantastic buying opportunity, a daily bullish divergence, maybe even a false breakout with the weekly standing at value in a pretty long uptrend. Now, when I'm saying a good buying opportunity, I'm expecting at least 0.87400, that is the previous high. The thing is, I understand fundamentally the dollar should gain against some currencies, not all, so this kinds of contradicts my theory. I'm no market wizard or anything, but I wanted to be the first to comment on this chart, as I missed being the first on the 'welcome back" chart.
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My friend thank you... I think confirmation is the key as usual, a bullish rebound and continuation of the trend needs more confirmation this time because we have seen a minor double top pattern over the weekly, so the odds of a bearish reversal have increased, as usual that doesn't mean a bearish reversal at hand, but i would be more confident to short if i see bearish technical developments along the way. This is how i treat the charts, and in this case for me to consider longing the pair again i would wait for such confirmation, like a major pin bar or a lower time interval bullish reversal pattern. Every scenario can play out i hope we can all jump into that scenario. Good luck Lad :)
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ForceFollower
2 years ago
Nothing to add. I agree. I'm short as well.
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EliteTrader101
2 years ago
Fantastic mark up of all the levels to trade between. You gave me the idea to find a clear trading range in Aud/Nzd. I love the Nice clear rejection off the edge of balance, i just see a bit of buyers who will try buying on the potential double bottom to slow this move, but ultimately it should drop lower to attract buyers. So i would take 1/2 off at your 1st target then add back in at a higher price as the buyers run out of steam.
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Agree with your post, but am on the fence if a minor retracement is going to happen or not. I am not sure how much merit you give to fib retracements, but I have the .382 retracement on the most recent swing on daily @ .8545. What's your thoughts on this level being reached before the downtrend resumes? A stop @ .8580 seems like a very good spot with such a symmetrical broadening formation. Guess I am debating a proper stop loss without giving away too many pips. Thanks Technician.
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Technician TOP dgreenan24
2 years ago
Hello, actually, i have decided to wait one more day before shorting, as the RBNZ rate is coming this Wednesday, its widely expected to hike rates again, so the pair may get some support towards the decision, where we might see sell the news following the release.
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dgreenan24 PRO Technician
2 years ago
Great point! Thank you sir.
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dgreenan24 PRO Technician
2 years ago
Isn't the Reserve Bank of New Zealand famous for being very clear on monetary policy decisions, thus making it very predictable as to what the announcement will be? I'm seeing a forecast of +3.25%. Higher interest rates=Bearish NZD. Though I don't want the dumb/confused money to come in and bounce the Kiwi to my stop. Hmmm...
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ForceFollower dgreenan24
2 years ago
Higher interest rates=bearish NZD? Why?
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dgreenan24 PRO ForceFollower
2 years ago
Interest rates are a huge factor for NZ corporations, mainly companies who finance high inventory levels. NZD is a commodity currency because NZ depends HEAVILY on exporting raw materials. Thus a higher interest rate in a country full of commodity exporters, will have a major impact on corporate profit, and in turn weaken the value of the Kiwi. But who knows what could happen during an announcement that only occurs 8 times/year, and is one of the most important announcements for the Kiwi.
+1 Reply
ForceFollower dgreenan24
2 years ago
Thank you for your answer. I agree with you about the commodity exports from NZ. However, I'm sorry, I'm an economist, and yet actually I don't understand how should higher interest rates weaken the local currency. I agree that they have a major (and negative) impact on corporate profit, but it doesn't seem to be relevant here (they contribute to a slower growth of GDP and thus a lower inflation and a higher unemploymenr rate). Rather, higher interest rates are supposed to attract foreign capital (due to a higher rate of return), which upon exchange to the local currency should boost demand for it thus contributing to its appreciation. What do you think?
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dgreenan24 PRO ForceFollower
2 years ago
Thank you for that, sir! I guess the way I am seeing it is when to enter a short position, because historically, since Bank of NZ is known for such clear, concise policy settings, the speculation or result of +3.25% interest rates has already been built into the market in advance. By last week Thursday, NZD took off to the moon, and followed suite on Friday before a shooting star was created, like mentioned by Technician. So I almost see it as the forecast of +3.5% was the announcement, and am trying to pick a top. You are exactly right in your comments above, I should have been more clear on what my angle is for this trade. I am merely a technical trader though. :) Thanks for the insight!
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Technician TOP dgreenan24
2 years ago
I agree with dgreenan in the point that the most of the rate hikes are probably discounted, or priced in as we have seen teh NZD outperform for the past year or so, compared to the AUD which was under heavy pressure while the NZD was resilient, and that clearly indicates the divergence in outlook of interest rates in the past year.
-2 Reply
ForceFollower Technician
2 years ago
I agree with both of you guys. This rate hike seems to be priced in, although markets is clearly waiting for this event. The NZDUSD has been caught in a range, no new highs, no new lows. I'm bearish, but I don't know what's going on, when market prints 'nothing bars' on a daily chart.
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dgreenan24 PRO ForceFollower
2 years ago
Good thing I was a spectator on this trade (for the most part)! You were right on the money, ForceFollower. However, the retracement on that 6 day uptrend went to the .786 level on daily chart to to the T, and had extreme respect for that level! That was my confirmed top in the short term at least. Now seeing a nice pull back. Not sure how far this could go, but could be a quick way to catch some pips in the near term. What do you guys think?
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ForceFollower dgreenan24
2 years ago
Well, perhaps, but not with me any longer. :) The NZD is way too strong now and the pair NZDUSD has actually confirmed its up trend. I'm not going to test my luck against it. No shorts on NZD against USD. However, if you are going to do it against the strongest ccies, like the AUD or GBP - I'm with you. I'm actually long AUDNZD. I've just written an article on this pair on my blog (http://forcefollower.blogspot.com/2014/06/the-audnzd-analysis-per-mid-june-2014.html).
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dgreenan24 PRO ForceFollower
2 years ago
Haha yeah I have been played a number of times this year trying to short Kiwi/Usd. Thanks for sharing, will take a look at it!
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This one failed
+3 Reply
Fxentourage. Technician
2 years ago
Np
Reply
Fxentourage.
2 years ago
Idea had to failed because of this shit ;)
NZDUSD Harmonics
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Trades don't fail because of anything, they just fail because they always do. So do not bug yourself of why, you will spend your life searching for a holly grail.
Get profits on the long run.
G.Luck
Reply
Fxentourage. Technician
2 years ago
:) WIll try
Reply
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