NZD/USD is having trouble making new highs above the .6550 minor psychological handle, which isn’t surprising since the level is around a 61.8% Fib retracement, the 200 SMA on the daily AND a descending trend line that has been keeping the bulls in check since late March.
Will NZD bears defend the fort for another day? Shorting at the earliest signs of bearish momentum would yield a good reward-to-risk ratio especially if you place your tops just above the trend line and aim for October’s lows near .6250.
If you don’t feel like selling Kiwi, however, then you could also wait for NZD/USD to break above the trend line that we’re watching and shoot for a retest of the .6700 or .6900 previous areas of interests instead.
Good luck and good trading this one!
Here’s another one for comdoll traders out there! EUR/AUD is bouncing in what looks like a symmetrical triangle on the daily time frame.
The School of Pipsology tells us that symmetrical triangles can break in either direction, so you might want to design trading plans that would profit no matter where EUR/AUD eventually breaks towards.
If you think that EUR/AUD will simply extend its uptrend, then you could target previous highs near the 1.6600 handle.
If you’d rather trade a downside breakout, though, then you can also wait for a clear break below the trend line and then eye the 1.5700 major psychological handle and previous area of interest.
Having trouble deciding how big your stop losses should be? Check out EUR/AUD’s average daily volatility for the past 30 days: