AUD/NZD Double Top and Channel Resistance

With EUR/NZD barely budging from my target entry area, I’ve decided to browse through other comdoll crosses today and found this potential short on AUD/NZD.

AUD/NZD 4-hour Forex Chart

AUD/NZD 4-hour Forex Chart

A few moments ago, Australia printed a bleak jobs report for June, with the employment change showing a 0.3K drop in hiring and the jobless rate jumping from 6.0% to 6.4%. Although New Zealand’s jobs data also turned out to be disappointing, Australia’s employment figures are far more dismal, which suggests that AUD might weaken against NZD for now.

AUD/NZD has found resistance at the top of its rising channel on its 4-hour chart and formed a short-term double top pattern, indicating that a selloff may be in the cards. Stochastic is moving down from the overbought zone, with a small bearish divergence to boot!

With that, I decided to short at market with a stop above the channel resistance and a target at the bottom of the channel. I’ll be moving my stop to entry once price tests the mid-channel area of interest. Here are my trade details:

Short AUD/NZD at 1.0975, stop loss at 1.1125, profit target at 1.0700. I’ll be risking 0.5% of my account on this trade.

What do you think of this setup? Any feedback would be appreciated!

Happy time

Other Popular Articles:

What is the STA strategy? Q1 2014 in Review Comdoll Trading Kit NZD/USD Trade

  • Disparity

    Hi,
    (Very) long time observer, just signed up.
    Did you take this trade then?

    Paul

    • Yup, entered at market around 1.0975. How about you?

      • Disparity

        Stupidly no! I’ll be paying more attention in future. Thanks for the lesson..

        • Ha, I was pretty late with my entry myself but I guess I just needed a little more confirmation from fundamentals. Looks like it’s still hanging around in that area (1.0950) though.

  • your analysis is correct, i also short and made 250pips

    • Thanks for sharing your thoughts! Let’s see how it goes in the next few days though.

  • Yeah looks like it’s still within a few pips of the entry area right around the top of the channel. Just make sure you set your stops right!

  • Thanks for sharing your thoughts! Looks like it’s not moving anytime soon but a short below that break would be a good way to catch the selling momentum. Let’s see how it goes!

  • Pingback: Forex Update: EUR/NZD and AUD/NZD Trade Setups | Forex Blog: Playing with Comdolls()

  • Pingback: Forex Trade Review: AUD/NZD Channel Resistance | Forex Blog: Playing with Comdolls()