NZD CHF Gaps Into Major Resistance For Short Entry

NZD CHF Gaps Into Major Resistance For Short Entry

Here is a potential trade that looks directly at the opposite view to that given in the previous post which had a bearish CHF theme.  So, one of the 2 trading ideas will almost certainly fail, yet both have good technicals supporting the respective future directions.

NZD:CHF opened tonight with a gap up and small rally straight into powerful resistance.

In particular I’m attracted to the short side based on the very tight stops that can be run from here – A daily close above this resistance invalidates the trade.

I’ve already entered short in anticipation of the current hourly candle closing as a bearish engulfing.

The following daily chart signifies the relevance of this resistance in the 0.7202 region:

An ideal downside target would be the gap fill at 0.6880 which is just over 300 points South of the current print. Stop loss to be placed above the 0.7202 area however this stop loss can be as tight or as loose as you need it to be based on your conviction of the trade playing out. I’ll probably look to stop out my position on any hourly candle close above 0.7232 which is 30 points above the resistance. A daily close above 0.7202 would probably be enough in itself to have me out of the position.

Hourly chart showing potential bearish engulfing from resistance and MACD negative divergence:

 

4 Comments
  • RS2OOO
    Posted at 22:06h, 06 December

    Still hanging on to this trade and unsure how likely it is to eventually turn a profit. Stop loss was set at 0.7242 and price came within 3 points of it today!

    This position is running as a direct hedge against the CAD:CHF long and so far the hedge is doing it’s job as CAD:CHF is outperforming NZD:CHF.

  • RS2OOO
    Posted at 17:43h, 08 December

    NZD:CHF short went through my stop loss by 3 points (YES, ABOVE MY STOP) But the position is still sitting in my acccount and now showing a profit!

    As the CAD:CHF swing long hedge was stopped out on a trailing stop loss today for a 60 point gain, at this moment in time the hedge has paid off and between the 2 trades I cannot take a loss.

    NZD:CHF stop loss will now be trailed.

  • Weekly Swing Trading Round Up 17th December 2011
    Posted at 00:32h, 18 December

    […] still holding the NZD:CHF swing short which seems to be consolidating all over the place but has yet to give me a true signal that the […]

  • RS2OOO
    Posted at 22:50h, 21 December

    Finally after 2 weeks it was clear this trade wasn’t going anywhere, and then suddenly in the space of a few hours it’s showing 80 pips profit (from zero). So I decided to hold and move stops to breakeven, however, the position was stopped out last night at breakeven.