darcsherry

NZDUSD | Perspective for the new week | Follow-up

Short
FX:NZDUSD   New Zealand Dollar / U.S. Dollar
With approximately 300pips move in our direction since my last publication on this pair (see link below for reference purposes); It appears we are at a juncture for a trading opportunity in the market as I suspect a risk of further decline for the Kiwi as Breakdown/Retest of Neckline which is also my Key level @ $0.71500 becomes imminent.
The US Bureau of Labor Statistics reported on Friday that Nonfarm Payrolls rose by 559,000 in May and despite figures reported to be below expectations, the Greenback appears to be on the verge of soaring in the nearest future.

Tendency: Downtrend ( Bearish )
Structure: Breakdown | Supply & Demand | Harmonic pattern (AB = CD)
Observation: i. The $0.7300 area appears to be a very strong supplication area since the beginning of the year 2021 as an attempt from buyers to break above this level in February was followed by an emphatic bearish run that lasted a whole month!
ii. It is also obvious that the $0.73000 level became a stalling zone (approximately 61.8% retracement of AB leg) for the correction of the Impulse leg AB as it was met with multiple rejections hereby emphasizing the strength of sellers at this juncture.
iii. In this regard, I shall look forward to a transition into an ABCD pattern with parameters explained below;
a. Impulse A-to-B is expected to be in harmony with the potential C-to-D leg.
b. The B- to-C leg is currently at 61.8% Fibonacci retracement (with the possibility of a 78.6%) of the A-to-B leg.
c. The C-to-D leg is expected to fall within 127.2 - 1.414% Fib. ext . of the A-to-B move @ $0.67500.
iv. The Breakdown of $0.71000 ( Demand zone ) in March 2021 reveals that sellers are beginning to creep in at this level for future investment in the Greenback.
v. This critical observation led to the identification of a New Supply level of around $0.72000/0.71500 for a future selling opportunity.
vi. Conscious trading shall anticipate a Breakdown/Retest of Key level @ $0.71500 in the coming week for confirmation.
Trading plan: SELL confirmation with a minimum potential profit of 300 pips.
Risk/Reward: 1:5
Potential Duration: 5 to 10days

NB: This speculation might be considered to make individual decisions on the lower timeframe.

Watch this space for updates as price action is been monitored.


Risk Disclaimer:
Margin trading in the foreign exchange market (including foreign exchange trading, CFDs, etc.) has a high risk and is not suitable for all investors. The content of this speculation (including all data) is organized and published by me for the sole purpose of education and assistance in making independent investment decisions. All information herein is for your reference only and I take no responsibility.
You are hereby advised to carefully consider your investment experience, financial situation, investment objective, risk tolerance level, and consult your independent financial adviser as to the suitability of your situation prior to making any investment.
I do not guarantee its accuracy and is not liable for any loss or damage which may result directly or indirectly from such content or the receipt of any instruction or notification therewith.
Past performance is not necessarily indicative of future results.

Comments