06 Nov Charts To Watch This Week; GBP:NZD USD:CAD NZD:CHF
Whilst we are seeing a fair amount of intraday volatility and little in the way of solid long term trending I’m going to focus my TA on a shorter term basis sharing a few possibilities for the week ahead.
Daily and Weekly chart’s are not giving a clear picture of the medium term future of this pair but shorter, albeit weaker time frames are worth watching with a view to trading the short side (yet again – I love shorting this pair!) on an intraday basis that may or may not eventually yield a more sustained move to the downside. My interest lies in the fact that on a risk versus reward basis it’s hard to ignore the possibilities when stop loss levels can be run so tightly against a short entry.
4 hourly chart shows a bearish engulfing from resistance. A short entry would allow stoplosses to be placed above the (orange) 100MA which is positioned 80 points above the current print. That stop loss would be trailed as the 100MA drifts down.
If I run this trade, I’d probably do so with an open target, simply trailing the stop.
If you are a little more bullish on the New Zealand Dollar and don’t fancy the above trade, you could keep your eye on this set-up which could yield a much longer term swing trade.
The previous Box Trade Swing short (that I missed taking) gave way to a 600+ point fall in price. Now we have a situation where a re-entry of this same set-up could give us another chance at this trade.
The daily chart shows a horrible bearish rising wedge formation heading straight into “Box Trade” resistance. One thing that must be pointed out is that MACD is not confirming the short side at present and it’s an indicator I have a lot of respect for. So, it’s one to watch for now as this presently bearish pattern starts to resolve itself. If price breaks above the rising wedge and finds support above it, I will very quickly become interested in taking a bet on the long side, mainly because I trust what MACD might be trying to say – It shows positive divergence on all Weekly, Daily and 4 hourly charts and a break above resistance would turn that into a buy signal for me.
On a shorter term basis there will most probably be an intraday short entry at the projected channel top combining with resistance in the chart below. Seeing how price reacts around this level will give a better indication of it’s viability for a longer term swing short.
Again, MACD is not confirming the short side so we have to be very careful in our management of this trade were we to take a short side position.
I will certainly update the blog if an when I decide to take a position whether that be short or long. But for now, something is brewing and I’m looking forward to eventually trading a nice move from this pair.
4 hourly chart shows a nice bullish inverted head and shoulders here. This is likely to take a few more days of consolidation before a faster up move takes place, but again, another nice trading set-up to watch with the bias being on eventually taking a long position with stop losses placed beneath the head in the 0.9894 region.
I’d only be interested in entering long positions from the 1.0060 – 1.0090 as a way to minimise risk on this set-up, so a little bit of downside before a new rally commences would be ideal.