TomProTrader
Long

NZD/USD - New Uptrend Opportunities

FX:NZDUSD   New Zealand Dollar / U.S. Dollar
Traders I recommend reading this entire post so that you fully understand what I have done to come to my analysis.

NZD/USD looks like a long opportunity on the 12H chart.

After analyzing this pair, I discovered that price appears to be moving in patterns. Price seems to have an impulse leg, and then has a corrective leg which measures approximately 124 pips each time, before the next impulse down move begins.

When I began analyzing the pair, I started by measuring the downtrend legs. I discovered that each correction seems to be around 124 pips. Price has recently hit a bottom, and has had some upside, and is showing signs of a new uptrend. Sure enough, when I measured the upside legs, we had a measurement of 124 pips as well. Despite the change of trend, the measurement of the corrective legs remained intact. This shows that these cycles are obviously having an affect on price.

With this information, I was able to predict and plot the next move on the chart. I have calculated each cycles move by measuring the amount of points it moved before a new impulse. After I found there was an approximate 124 pip corrective move before each new impulse, I was then able to replicate a cycle at around 124 pips to see the future direction of the instrument.

I am expecting an up move of 124 pips which will complete at around 0.7029. Below I have illustrated the calculations as to how I came to this conclusion.

The principle of the cycles being used here is that every time there is an impulse leg in either direction, there is a corrective move of 124 pips, and then an impulse move which exceeds the impulse leg. (With exception of Cycle #1, which was the first leg of the trend and excepts this rule). With this information we can calculate (using data from the downtrend corrective cycles + Cycle #1 data) where cycle 2 is likely to end up. Using the calculations below we can make a mathematical assumption as to where price will lead.

  • Cycle 1 = Cycle 1 + 124 = 0.6905
  • Cycle 2 - Cycle 1 + 400 = 0.7029

Following these calculations, we can expect a reliable short term up-move, by using the previous trend cycles from the downtrend. Since there is a change of trend, it will interesting to see where these cycles end up. We could get a lot more pips than we bargained for.

Do remember that price may have a correction before Cycle #2 begins. It is important you watch this carefully before considering a position.

I will be posting updates on this trade below, so leave it a like or follow so that you can keep up to date with this analysis.
Comment: Price had a successful correction of cycle #1. Price has broken this level and is now heading towards Cycle #2.

Buying after the small correction into cycle #1 was a good idea (See more details of this in the chart below). I am expecting price will have a rally from this level into completion of Cycle #2, without exceeding the corrective level that was ideal to buy at.

Comment: Price is correcting after exceeding cycle #2 target (See attached chart for details)

I believe price will continue to pull back. I am hoping that price does not go below the previous correction low before completing Cycle #2.

Trade closed manually: With Dollar now trending, I am reluctant to hold this position, as I will likely just ride it into a loss (Or volatility for a long period of time when I could just put the funds elsewhere).

Usually the trend of Dollar wouldn't affect me so much. But with Dollar recently hitting a long term bottom, it means a change of trend could take place, rather than just any normal move.

Within my trading rules, I won't be taking the risk.

Good set up, but is just not meant to be. Yet.
Rather short now covering at the top?
+1 Reply
ymjun35 ymjun35
@ymjun35, till 0.67
+1 Reply
@ymjun35, No. I believe price is having a normal correction. This is evident by price hitting the cycle top, correcting, rally again, and finally correcting again.

I think price is just slightly volatile around this area almost entirely due to the DXY hitting a bottom, and now price is rather indecisive, affecting this pair as a consequence.

After the price corrects, I believe the target seen on the chart will complete. However, if price breaks below the previous correction (See the line on my chart) then I will reconsider the analysis.
Reply
Alas, didn't make HH. Remember the last time when you charts short, saying huge short was about to occur and withdrew from it and it shot up but eventually went down huge?
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