We’re ending the trading week on a strong note by looking at one short-term and one longer-term comdoll setup. Get ’em while they’re hot!
First up is a nice and simple short-term trend trade.
NZD/USD is having trouble breaking above the .6500 major psychological handle, which isn’t surprising since it line up with a 50% Fib retracement AND the 100 SMA on the 1-hour time frame.
Is Kiwi ready to see more losses? Shorting at the earliest signs of bearish momentum would give you a good reward-to-risk ratio especially if you place your stops just above the SMAs and aim for new August lows for the pair.
Think Kiwi’s bullish momentum is just getting a breather? You might want to wait until NZD/USD breaks above the resistance levels that we’ve identified before you pull the trigger on your long positions.
Remember that break-and-retest opportunity that we’ve been eyeing for weeks? Well, the 100 SMA has finally crossed below the 200 SMA. Not only that, but the pair has bounced lower from the 1.3300 MaPs and Fibonacci resistance!
As you can see, the last SMA crossover was back in March 2018 and that had heralded at least a 600-pip move for USD/CAD.
Will the crossover lead to a longer-term downtrend for the dollar? Shorting at current levels could get you in early if USD/CAD ends up making new 2019 lows. Somewhere just above the broken trend line and SMAs would also be good invalidation areas.
Still on USD/CAD’s #TeamUptrend? That’s fine, too. Just wait for a bit of momentum and see if the dollar can trade above the trend line before you execute them long trades.
Good luck trading this one, brothas!