Well, first of all, I typically don’t like to trade Asia. The only exception being if there are some significant events that have set ups…tonight would be such an example. Between Geithner and a handful of hot zones (economic events) coming out of Japan, Australia, and New Zealand.
I have to tell you that the NZD/USD is not in place that has me too excited. The pair is up against a double top, if not triple top at .6627, .6630, and .6638. The 240 minute chart is indicating more of a distribution cycle so I would be more inclined to short the ceiling with a 10-12 pip stop loss based on the .6638 high.
I’m not wild about going head to head with a triple top and expecting a breakout in front of a hot zone, so the breakdowns on the 15 and 30 minute kiwi look like better set ups. I avoid momentum plays where the actual release initiates the trade so the 15 minute which is already triggering a short is looking like a lower risk, shorter term set up.
Now the Aussie presents a different scenario altogether. With a fresh breakout on the daily there is bullish momentum. The 15, 30, and 60 minute charts are heading sideways. I prefer the look on the 30 minute chart. It’s a momentum play which is to say the market is sideways and I am waiting for a breakout or breakdown. The MACD Histogram on the 30 is currently positive so I am leaning towards a breakout.
The other set up would require a pullback to the 34ema high on the 240 minute chart. This set up is swing and that means we need a correction of the current uptrend. The 34ema high is currently .8210 and this is particularly nice because the .8200 level can act as a backstop with that major psychological number.