I’m looking at a couple of trend retracement setups, plus one long-term post-breakout momentum play this week. Check ’em out while they’re fresh!
I’ve already got a short Kiwi position open, but I thought I’d share this neat opportunity to catch the commodity currency’s drop at a pullback.
EUR/NZD recently surged past the resistance at the 1.7300 major psychological handle and climbed close to 1.7500 before retreating. The Fib tool shows that this is in line with the 50% retracement level, which might be enough to let the rally resume.
Bullish pressure could return as stochastic makes it way out of the oversold region, possibly taking the pair back up to the swing high and beyond.
If you’d rather go for momentum, this falling wedge breakdown on NZD/JPY’s daily time frame could also be worth catching. After all, the formation spans roughly 900 pips in height so the resulting selloff could be of the same size.
Do keep in mind, though, that stochastic is already cruising around oversold levels to show that sellers are feeling exhausted. Booking profits and allowing buyers to take over might bring the pair back up for a retest of the broken wedge support around 74.00 to 74.50 to gather more selling energy.
Not in the mood to hop in any of those Kiwi plays? This classic break-and-retest setup on EUR/GBP might be of more interest to ya!
The pair is still trading inside an ascending channel on its 4-hour time frame and is currently testing support, which coincides with the 61.8% Fibonacci retracement level.
At the same time, stochastic is dipping into oversold territory to signal that sellers need a break. Once the oscillator turns higher, buyers could return and push the pair back up to the swing high at .9030 or the channel top closer to .9050.
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