Partner Center Find a Broker

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.

NZD/USD 4-hour Forex Chart
NZD/USD 4-hour Forex Chart

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!

Cheers,

Happy time

Other Popular Articles:   

Comdoll Trading Kit GBP/CAD TradeWhat is the STA strategy?Q3 2014 in Review

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.