It’s gonna be a busy week for the Kiwi dollar, so here are setups on GBP/NZD and NZD/JPY to catch the potential volatility!
Big week for the New Zealand dollar up ahead, and if you need to catch up on why, check out Pip Diddy’s weekly forecast here.
And after reading his forecast and you’re bullish on the Kiwi this week, you might wanna check out GBP/NZD as there are few technical arguments for a short to throw on the watchlist.
If you’re aggressive, yesterday’s spinning top is a good sign of indecision and potential reversal, and if today’s candle closes red, you could look to take a short play at market.
For the less aggressive, there are two other setup to check out: first a pullback higher to the minor area of interest around 1.9600 and 61% Fib could draw in resistance for a potential short play, especially if stochastic rises back into overbought territory.
Second, if there is no pullback and the pair drops from here to break the rising ‘lows’ pattern, that could be confirmation of the return to the downtrend to watch out for.
If you’re bearish on the Kiwi, then NZD/JPY should go on your watchlist as the pair saw a breakdown from a major level of interest around the 75.30 handle that held as resistance through the Summer of 2018. Also, this could be a way to play the global risk off sentiment we’ve seen recently if you believe we’ll see more of it this week.
But with the pair already trading near the middle of the range between 72.50 -75.30, it might be a good idea to wait for the pair to make it’s way higher to retest the resistance area and show some reversal patterns. Again, there’s potential for volatility to pick up in the Kiwi, so it might have no trouble getting up there.
And for those who don’t want to mess with the Kiwi this week, here’s a textbook technical pattern on EUR/CAD that should catch your eye.
On the four hour chart above, we can see the pair in a clear down trending channel pattern, as well as a solid support and resistance area around 1.5050 that just rejected the bulls in the last week.
A conservative play would be to wait for a retest of the falling “tops” and for stochastic to rise up and re-signal potentially overbought conditions. For the more bold, selling at market up to that strong level of interest around 1.5050 could be the play to make if you don’t mind a lower potential return-on-risk.