Potential Upside Break for NZD/USD? – Stopped Out

Stopped Out: 2013-12-16 4:05

Bought at the top then stopped out on the drop! What in the world went wrong with my NZD/USD trade?!

nzdusd

They say that hindsight is 20/20 and when I look at the chart above, I could clearly see where I went wrong. I was too excited to set my entry orders that I got faked out!

Unfortunately, I couldn’t log into my trading platform during last Friday’s U.S. trading session so I wasn’t able to cut my losses when the U.S. retail sales release came in stronger than expected. With that, the pair slid all the way down to my stop at .8200 right before my eyes and put a 0.05% loss on my account.

Clearly I’m frustrated with how I executed this trade and with how I was unable to access my trading platform right when I needed to. But oh well, it’s time to move on and bounce back with a good trade, right? With the FOMC statement coming up, the markets could present a lot of trading opportunities so hit me up if you have any ideas!

Trade Idea: 2013-12-12 1:53

What’s this I’m hearing about hints of an RBNZ rate hike?! Word through the forex grapevine is that Governor Wheeler is becoming more concerned about strong inflationary pressures and less worried about Kiwi strength!

NZD/USD is still in a downtrend on the 4-hour time frame though, as the pair is trading inside a falling channel. However, it looks ready to make an upside break and is already hovering around the top of the channel.

nzdusd

I’m looking to enter on the break of the channel resistance or possibly on a quick pullback so I’ll be watching this one pretty closely. For now, I’ve got my eyes locked on the .8300 handle but I haven’t set any orders just yet. Stochastic just made its way out of the oversold region and is heading higher so an upside break looks very likely.

I’ll also be on the lookout for the release of the U.S. retail sales report later, as strong figures might bring dollar strength back in play. After all, consecutive months of good NFP figures might lead to high consumer spending numbers.

What do you think of my breakout trade idea?

Happy time

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35 comments

  1. adnan

    it is going to retest channel upar border but with a bit of Bearish stochastic Divergence on 4 hr Chart .. what do u say about it ?

    Reply
    • Happy Pip Post author

      Yikes, thanks for pointing that out! It could depend on the US retail sales release, might go for a larger pullback if that comes in strong.

      Reply
  2. FxSniper

    I was long this pair but after today’s price action, I am now neutral to bearish until at least .8000 figure. The rejection today, of the descending trendline couldn’t be anymore emphatic. I think pair is ready for .8000

    Reply
    • Happy Pip Post author

      Yeah looks like the US dollar ain’t gonna give in without putting up a fight! You’re right about that trend line holding for now, looks ready to head back to the bottom of the channel. Do you have any open trades on NZD pairs?

      Reply
    • Happy Pip Post author

      I see. “When in doubt, get out”, right? Besides, the pair seems to be bouncing off a support area so I think it was a good decision to just take those profits and reassess. Keep me posted if you have any new trades!

      Reply
      • FxSniper

        yes a couple. I currently have eu, ej, gj,gbpnzd long. nzdusd short. waiting on gbpusd at 1.6210 to get on long. also waiting for gbpaud at 1.8110 to get on long for a possible 1k pips! I am particularly keen on that pair.

        Reply
        • Happy Pip Post author

          Got my eyes locked on that same area for GBP/USD. Maybe this week’s set of events will take it there.

          Reply
          • FxSniper

            Yes. I have been patiently waiting like a croc on that level. If I get it this week, that will make my Xmas.

  3. FxSniper

    I now longed gbpnzd at 1.9820 targeting 2.1038 resistance. Effective stop just below 1.9600. With that, I believe NZDUSD is headed lower. 0.8000 continues to attract sellers.

    Reply
  4. Abbey

    I have an OCO order to go long at 0.8330 and 0.8085 both with 75 pips stop, but for now, I’m out of the NZD/USD pair, it’s like a wild horse.

    Reply
  5. FxSniper

    Pair just showed me a hand to short and I am in at 0.8264 with risk at 0.8323. This looks every bit a very long road down. let’s see what happens to near term supports first but it looks like pair is ready for 0.7450 area!

    Reply
    • Happy Pip Post author

      Woah, .7450?! That’s really far! How long do you think it’ll reach that level though? If 2014 is indeed the Year of the Dollar, then I think this is possible. What about the end of year Santa Claus rally though? Might trigger a quick bounce before it resumes the drop?

      Reply
      • FxSniper

        As usual, I am no utopist. I am realistic. for now, I am targeting anywhere between 0.8000-0.7800. intraday swings will guide me. My real interest is on gbpnzd where i have bigger stake on the long side. The risk profile on nzdusd is very manageable for me and position not really big. I have other bigger interests. Besides, 0.7450 is just 800 pips henceforth and is quite easy to hit if indeed the trend catches on. I will ride as far as it takes me and so long as my stop remains untouched.

        Reply
        • Happy Pip Post author

          I see. Yep that seems like a reasonable target for the near term, could adjust stops by the time price reaches the .8000-.7800 area. This could depend on the FOMC statement though…

          Reply
  6. FxSniper

    2014 looks indeed the year of the dollar across the board. usdjpy looks ready for 110 area and though usdchf keeps falling, it should regain a lot of ground next year and so, eurusd can keep running up to 1.4250 area (maybe more) with seemingly no challenge. I believe the crash time is coming for that pair next year.

    Reply
    • Happy Pip Post author

      I agree with you! Been waiting for EUR/USD to drop but it just doesn’t happen. USD/JPY seems like the best pair to play that “year of the dollar” bias though, mostly because of the stark contrast between the Fed’s and BOJ’s monetary policy biases, but let’s see.

      Reply
      • FxSniper

        I have waited for gbpusd for two weeks and in the meantime, I managed to catch eurusd at 1.3719 and so far that has been holding and looks set to be the new floor while we pursue the hilltop. 1.3750 is a good handle for willing souls. I understand many traders are factoring in the upcoming resistance but from where I am looking, I see no indication that pair is backing down and so, I keep waiting for a convincing break up. Usdjpy is really good and just posted a Day close that allows for the bulls to rejoin and keep pushing. 103.00 is a good floor in my opinion and we should at least see 108.80 in near future. eurjpy and gbpjpy posted bullish continuation candles too and look like we will have a great week yet again!

        Reply
  7. Andre van Biljon

    Potential long with strong support at approximately 0.8250. See 8hr chart on Ichimoku. My target is 0.8402, previous resistance. Wait for candle to close on the 4hr timeframe (might bounce on the Kijun and the 50sma and proceed with upward trend). Potential 150 pips. Let’s wait and see what happens.

    Reply
    • Happy Pip Post author

      Oh cool, you use Ichimoku! Fundamentally I’m still inclined to be NZD bullish, mostly because of the positive carry and potential rate hike next year. I’ll definitely wait for better confirmation this time around before jumping in though. Keep me posted on your trade!

      Reply
      • Andre van Biljon

        The pair is still on track. It bounced on the Kijun and the 50sma as suspected, proceeding with upward trend. See my previous comment posted December 16, 2013 at 7:01 am.

        Reply
  8. FxSniper

    Of course it may go anywhere but pair is doing it’s latest round of lower high on Daily chart off resistance TL and so long as 0.8330 remains in tact, this pair looks terribly wobbly. If you watched price action closely, you will have noticed a certain reluctance to follow up on the apparent hammer formation on Daily chart. If today closes with that reluctant status quo, it would be another signal that bulls are fast losing it and unless they can conjure up a quick move past 0.8330, they look bound to be blasted away pretty sooner. Last Thursday price action rejection of higher places remains strongly valid and I am working with that. I shorted at 0.8264 and nothing suggests to me I might be wrong there. I will wait it out or take a loss

    Reply
    • Happy Pip Post author

      Yep I’m seeing a lot of hesitation with this pair too. Been attempting to break higher in the past few weeks but it seems buying pressure never caught on so far. I’m thinking the FOMC decision will be a huge catalyst so I’ll just react to that event this week.

      Reply
      • FxSniper

        gbpnzd is showing a clear bullish flag on Daily and with that, shorters of nzdusd will have more signal on their hand that kiwi is indeed looking like a sinking ship with no hope of staying afloat much longer. Just my opinion tho. Above 0.8330, that opinion becomes invalid.

        Reply
  9. FxSniper

    NZDUSD still looks very bearish to me henceforth and Im in with some small position as I wait for more development. At the break of 0.8080, in my case, the bears win! For now, I will be lightly short. My overall target on this is 0.7100 unless another thing developes before that swing completes

    Reply
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