The Perfect Storm - NZD/USD

FX:NZDUSD   New Zealand Dollar / U.S. Dollar
The NZD/USD             has been in a significant downtrend since July of 2014 as the USD strength continues to rule the FX Market.

We have seen quite a dramatic pullback within the NZD/USD             that has now set us up for an excellent selling opportunity to trade back in line with the overall downtrend.

We have 8 factors of confluence on the daily chart that support a bearish bias.

1. Trading With The Trend
2. Pinbar Sell Signal
3. Double Top Formation
4. Rejection of 50 EMA
5. Rejection of .5-.618 Fib Retracement
6. Rejection of Key Resistance at .7600 (Previous Key Support)
7. Rejection of Descending Channel Trendline
8. Bearish Wedge Continuation Pattern

We have two entry options available to use, both offering great risk-reward ratios.

I expect this market to breakdown and target the next KEY weekly support at 72 cents. Breaking below 72 cents opens up the gates for 70 cents as the next downside target.
Great analysis but seems to be stopped out before price went down per your expectation. Don't understand why you chose 0.7590, instead of above pin's high, which will also be above the key resistance (0.7600) you identified. Just curious.
Price made it down to 0.72. That's where I tool profit on thIs trade just before it rallied back up. made almost 10% on this one.
Casey_Yeo jarden.torcuato
Good for you. I'm more curious about the stop loss location in ActiveTrader's analysis above, nothing else.
+1 Reply
I see what you mean. I had my stop at 0.762 and held it there until it hit my profit target. I know his analysis says a little lower but I wouldn't be suprised if he did something similar.
+2 Reply
Casey_Yeo jarden.torcuato
To clarify myself, I'm not after what is right or wrong. I just want to understand ActiveTrader's thought process behind that stop loss location as I may learn something new if he responded. I had the same stop level as you.
+1 Reply
@casey_Yeo My sincerest apologies on the delay with this response, I missed the notification. What I meant by "stop above R1 @ .75900", was that .75900 was the absolute lowest you should have your stop. The safest stop location was above the pin on 2/26/2015. I will be sure to clarify this in future posts! Thank you for pointing this out!
Casey_Yeo ActiveTrader
No worries mate. Thank you for responding.
+1 Reply
Great analytic style, keep it up, mate!
+1 Reply
ActiveTrader HamedAghajani
Thank you @HamedAghajani!! I appreciate the support!
Master analysis as always!
+1 Reply
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