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.
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!
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