Best Setup of the Week
Here we go, fellas! It’s time to take a look at which pair I think made the best setup of the week. And the winner is…
Check out this 300-pip drop by the pair:
NZD/USD was actually off to a good start for the week but it just couldn’t sustain its rally past .7950. A rising wedge even formed, but it was all downhill from there!
To be fair to the other comdoll contenders, AUD/USD and USD/CAD also made 300-pip moves during the week but an NZD/USD short trade had stronger fundamental grounds. As Forex Gump and Pip Diddy pointed out, New Zealand got slapped with a couple of debt rating downgrades towards the end of the week. This made an RBNZ rate hike less likely, causing the Kiwi to lose its appeal.
Had I been watching this pair more closely, I could’ve taken a short trade right at .7950 when stochastic was overbought. I would’ve placed my stop above the .8000 handle, probably at .8050, and risked 0.5% of my account.
I could’ve added when the pair pulled back to the 50% Fib, which was in line with the .7900 major psychological level on Wednesday. After that, I could’ve added again at the 61.8% Fib on Thursday because it was close to the .7800 major psychological resistance. Had I held on until the end of the week, I could’ve taken profits at the .7650 mark.
All in all, that would’ve amounted to 700 pips in profits and, with a 100-pip stop loss, equated to a 7:1 trade. With my 0.5% initial risk, that would’ve been a 3.5% return!
Oh well, I’m not feeling too sore about this missed trade since I managed to catch a pretty decent win with my long USD/CAD trade. I wish I could make much more next time though!
Help me catch these sick setups by dropping me a line through any of these:
What Moved the Comdolls Last Week?
The comdolls started the week strongly enough by posting significant gains against the Greenback. No major economic reports were released from the commodity-related countries on Monday and Tuesday, but investors bought up the high-yielding currencies when word got around that the European officials are making progress on the region’s debt crisis.
Around the middle of the week, the comdoll price action did a 180-degree turn like it was walking on a runway. This was around the time when the “hope rally” in other assets faded out and the global economic concerns resurfaced. Heck, even the commodities’ price action weighed on the comdolls! Oil dropped on reduced demand speculations as gold slipped for the second day in a row. AUD/USD ended up erasing all of its intraweek gains, while NZD/USD closed below the .7800 support.
For the rest of the week the comdolls continued to post losses against the dollar on continued risk aversion and bearish economic reports from the commodity-producing countries. NZD/USD took a huge hit when credit rating agency Fitch surprisingly downgraded New Zealand’s rating by a notch from AAA to AA. Not only that, USD/CAD also continued to blast its way to its one-year highs despite the improvement in Canada’s monthly GDP. Good thing my friends and I were able to take advantage of the Loonie’s price action when we spotted a rising trendline setup!
With a jam-packed week ahead of us, where do you think will the comdolls’ price action go? Will we experience another round of risk appetite, or will risk aversion continue to set the tone in the charts? You’re welcome to share your thoughts on one of my cool links below!
Hope you’re enjoying your weekend!
This content is strictly for informational purposes only and does not constitute as investment advice. Trading any financial market involves risk. Please read our Risk Disclosure to make sure you understand the risks involved.