Bahh, it looks like my latest GBP/CAD short forex trade idea ain’t showing any confirmation signals yet so I’ve decided to hunt for other comdoll setups. Here’s what I found on NZD/USD.
A descending trend channel is forming on the pair’s 4-hour forex chart and price is on its way to test the top. I’m inclined to think that this area might hold as resistance, as it lines up with the .7900 major psychological handle.
Stochastic is still moving north, which means that there’s enough bullish momentum to trigger an actual test of the channel resistance. I’ll be waiting for confirmation from the oscillator and reversal candlesticks before shorting, but I plan to set a wide stop past the .8000 handle and aim for the bottom of the channel at .7500.
In terms of fundamentals, I think this pair’s downtrend could resume since New Zealand is in a weaker spot compared to the U.S. economy. Although the pair surged higher after RBNZ Governor Wheeler mentioned that they’re keeping close tabs on housing inflation, I doubt that the New Zealand central bank is ready to hike interest rates anytime soon… at least not before the Fed does anyway.
What do you think of this setup? As always, I’d love to get your feedback on this!
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