A Quick Look At AUD:NZD For Potential Swing Short

A Quick Look At AUD:NZD For Potential Swing Short

Since the AUD:NZD Swing Long from February never made traction from support, I’ve been watching the pair and waiting for a retrace to switch short into the trend.

For me, the problem with retraces is being confidence that it is indeed a retrace of a macro trend as opposed to a genuine reversal of that trend. The current AUD:NZD chart doesn’t give a lot of evidence either way but is close to giving an answer. Any signs of weakness at current levels will interest me in entering short targeting a double bottom or maybe new lows.

Here’s a few charts showing what I’m looking at starting with the 4 hourly where price has retraced to a previous congestion zone. How price behaves in this area should give clues as to it’s likely future strength or weakness:

The Daily chart shows price oscillating around the 1.2814 level which has historically proven itself as a trend turning point, or rather, Support and Resistance:

The Weekly chart has price rammed up against the converging 20 MA (Blue) and 50 MA (Pink). If there is to be forthcoming weakness then these 2 MA’s should provide enough resistance to ensure this Week’s candle does not close above them. It is worth noting however that price seems to have found support above the 200 MA and other than a brief couple of Weeks below it in 2008, the 200 MA has provided support on the Weekly time frame without fail for 7 years:

In conclusion there isn’t anything giving certainty here that the current down trend has legs, but I don’t think the answer is far away and therefore I’ll be monitoring AUD:NZD on an intraday basis in search of set-ups to enter short. If I take a position, I’ll post details in the comments section beneath this post.

 

 

1Comment
  • This Week's Swing Trading Round-Up 3rd June 2012
    Posted at 23:55h, 03 June

    […] half a DOW swing short from 12,900 which feels pretty good right now.I’m still holding the AUD:NZD swing short, although this wasn’t initially recorded in the swing trading log because despite […]