We caught two trades last week. The first happened on the NZDUSD
– a long trade after a Bollinger Band
spike and a momentum divergence. 0.67 was a major supply zone
but the first time price went into it, price did not show a strong reaction – there was also no divergence yet. As reversal traders we know that those aren’t high probability setups so we waited for the next trend wave that came and that also lead to a momentum divergence. The follow through wasn’t strong and when price re-tested the level again, we cut our position. Eventually, it sold off but the setup wasn’t textbook.
The second trade happened almost simultaneously on the USDCAD
and it was a much better trade. Price grinded lower along the outer Bollinger Band
. The last wave came with a Bollinger Band
spike and printed a divergence. A classic reversal pattern with a good follow through. The NFP data helped our trade make it to its take profit.