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Looks like NZD/USD didn’t quite reach my .8000 entry-level!

As I have been telling my friends on Twitter yesterday, I was having second thoughts about the price action reaching my orders when NZD/USD started dropping during the London session. And this was even before the BOE and ECB interest rate decisions were released!

NZD/USD Ascending Channel

Still, when the euro and the Aussie and Loonie were inching higher against the Greenback during the U.S. session, the Kiwi remained weak. And why not? New Zealand’s commodity prices showed a 0.8% decline in December, only a bit better than its 1.1% drop in November.

Even more important for my trade is stochastic‘s departure from the overbought region, which suggests that the bearish divergence that I pointed out yesterday might have played out without hitting my orders.

I won’t be leaving this setup completely though. The pair is currently bullish on the 4-hour chart, with the mid-channel level supported by a possible bullish divergence.

Also, a quick look at the daily chart will show that the setup is still valid with a bearish divergence still supporting a bearish trade. Unfortunately, it probably won’t reach .8000 in the next couple of sessions. We’ll see!

For now, I decided to close my orders on this pair because I want to keep my trading resolution of not leaving positions over the weekend. Ha! I don’t know how long I can keep up with my “trading resolutions,” but hey, a girl has to try, right?

What do you think of my plans? Was I too quick in giving up, or should I just adjust my entry orders? Your opinions are always welcome!

Chips, dips, and gimme those pips!

Happy time

Trade Idea

Are those comdoll rallies overdone yet? If a midweek reversal is in the cards, I have this NZD/USD short trade idea ready.

As you can see from the 4-hour chart below, the pair is currently approaching the .8000 handle, which is a major psychological resistance level.

NZD/USD Ascending Channel Trade

Scrolling back further would show that the .8000 mark acted as a significant area of interest before as it shifted between being support and resistance for the pair. It also happens to line up with the top of an ascending channel, which could make it an even stronger resistance level. To top it off, I’m seeing a neat little bearish divergence, too!

As for fundamentals, well, here’s where it gets tricky. You see, there’s hardly anything stopping higher-yielding currencies from soaring up the charts as risk appetite is really strong lately. What could potentially turn things around is the possibility of a midweek reversal and profit-taking scenarios before the end of the week.

Of course, let’s not forget the ability of euro zone debt problems to bring good ole risk aversion back on the table. I heard from Pip Diddy that a couple of bond auctions are taking place today and, if things don’t turn out too well, the comdolls might be forced to give up their recent gains.

Do you think this trade will work out for me? As always, I enjoy reading your comments, tweets, and replies on Facebook so keep ’em coming!

Chips, dips, and gimme those pips!

Happy time

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.