How’s it going, comdoll buddies? As I mentioned in my NZD/JPY forex trade idea blog post last week, I’ll be putting in my actual entry orders this week. I’ve decided to wait for the outcome of the Greek referendum and for weekend gaps to get filled before shorting this one.
I zoomed in to the 1-hour forex chart to look for entry areas then I saw this short-term falling trend line connecting the recent highs. This resistance level coincided with the broken support around the 82.00 major psychological mark, which seems to have held as a ceiling when the pair closed its weekend gap. I was able to short at market (81.85) at 0.5% risk and I’ve set another short order on a higher pullback to 83.00 for another 0.5%.
Since I based my initial trade idea on the head and shoulders breakdown on the daily time frame, I’ll have a huge profit target on this one. I also set a wide stop at 85.00 in case event risks this week lead to a pop higher for NZD/JPY.
I’m maintaining a long-term bearish bias on this pair, as the stock market fiasco in China could mean more risk-off moves and weaker demand for New Zealand exports. Aside from that, I’m also expecting Greek debt talks to keep risk aversion in play in the coming days. Of course I’ll be ready to cut losses in case an agreement is made since this could lead to an unwinding of these short positions.
What do you guys think?
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