I’m seeing another potential swing trade with this AUD/NZD reversal forex pattern on the daily time frame, and this one lines up pretty neatly with my bearish Kiwi bias. After all, the RBNZ just recently cut interest rates and it looks like New Zealand’s dairy industry isn’t holding up so well.
Earlier today, the Global Dairy Trade auction showed another drop in prices, following the previous auction’s 1.4% bounce. This was followed by New Zealand’s current account balance which showed a deficit driven by a decline in export earnings, led by a 13% decline in dairy prices.
Because of that, I’m thinking the Kiwi could fall further against its forex counterparts, particularly the Aussie which has been on a tear lately. I haven’t figured out my exact trade entry levels yet but I’ve got my eyes locked on this inverse head and shoulders pattern.
I could wait to go long on a break of the neckline around the 1.1300 handle but I’m also keeping my fingers crossed for a quick pullback that might allow me to enter at a much better price.
Australia still has its jobs release on tap for this week so this should give me a better idea of whether to jump in long at market or to catch a short-term retracement. This chart pattern is over a thousand pips in height anyway so I could set a wide stop and a huge profit target for this one.
What do you guys think? As always, I’d love to get your feedback on my trade ideas!
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