The chart shows a potential wave count for the NZDUSD
, the chart is a little complicated but shows the NZDUSD
correcting higher in repeated three-wave moves beginning in August 2015 (marked W-X-Y
red). The second of which red W-X(a corrective down move blue a-b-c circled) may have finished just short of its projected area the yellow box. If the count is correct, you never know that but it looks quite good, then the pair should start the red y leg of the w-x-y
correction that will terminate around 0.80 more than 1,000 pips to the upside. Risk reward looks quite good as if it makes a new low the pattern will fail so the stop loss is in at only 124 pips.
Fundamentally it has some merit
, the NZD economy according to my surprise index is doing better than the markets suggest and the US currency seems to be pricing in near perfection. I am not sure I like selling the dollar but the market seems to be heavily long the USD and I generally like to trade with a contrarian bias.
I have taken the trade risking 2% of equity on my main account.