GBP NZD Back On Watch List For Possible Swing Long

GBP NZD Back On Watch List For Possible Swing Long

GBP:NZD was a potential swing long candidate a couple of Months back and although it rebounded from my “line in the sand” support, it sliced through some quite strong supports on it’s journey there so I gave it a miss.

One of those failed “supports” was in the 1.9510 area and you can see from the chart below that it failed to provide support in July and again in August. Most people would then go on to dismiss that level as support in the future but in such instances I tend to keep the horizontal lines in case I can learn something from them in the future.

On the Daily chart price now appears to be attempting to gain traction at that same “support” level, and adding to the technical case is a clear positive MACD divergence created from the previous 2 swing lows as can be seen in this Daily chart:

The Weekly chart shows how price reversed from that aforementioned “line in the sand” in the form of this falling wedge back test defined by the red circle:

On that Weekly chart price is clearly underneath all of the major moving averages, but I very much like the long term positive MACD divergence that has formed over the last 2 Years.

It’s too early to say if anything will come out of this potential swing long set-up as there isn’t quite enough bullish evidence to jump into a trade just yet.

But, if bulls are going to start buying GBP against the NZD, now is the time where they collectively have a chance to make something of it.

I’ll be watching this pair over the coming days, particularly on the 4 hourly time frame for early clues to potential future strength. An ultimate target for any long positions would be 2.0984 level as defined by the resistance line you can see in the Daily chart above, however, it’s a little too early to start setting sights on a rally that will take us there, just something to bear in mind.

If a long position is entered on this pair, I’ll post the entry details in the comments section below.

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6 Comments
  • Swing Trading Round-Up; 30th September 2012
    Posted at 19:23h, 30 September

    […] had time to scan through.No new positions were taken, although I was quite prepared to enter the GBP:NZD long, but a nice entry didn’t materialise and it’s touch and go as to whether bulls […]

  • RS2OOO
    Posted at 19:25h, 03 October

    Long GBP:NZD at 1.9626

    There are good reasons not to enter at this level, but I want to see it in profit before the close and from then I can decide whether it has got the strength to break higher without having to pull back to 1.9495 region.

    Initial stop loss is wide whilst I wait for everything to line up to confirm the trade.

  • RS2OOO
    Posted at 19:59h, 05 October

    I didn’t expected GBP:NZD to take off in the way it has done and had been expecting a slower more choppy rally. Still, can’t complain!

    On the basis that it looks like we are heading into the Weekend near Hourly / 4 Hourly resistance that has attracted sellers a number of times before, I’ve decided to cover half of the position at 1.9783 for a profit of 157 points.

    Will run the second half of the trade ahead of a potential break beyond resistance in the coming Week.

    For now, I’ve not moved stop losses, but will review the chart over the Weekend.

  • This Week's Swing Trading Round Up; 6th October 2012
    Posted at 17:36h, 06 October

    […] certainties but both had characteristics I like to see before entering a position.These were GBP:NZD for a Swing Long and CAD:JPY for a Swing Short.Of the 2 I’d have preferred a CAD:JPY position […]

  • This Week's Swing Trading Round-Up; 13th October 2012
    Posted at 22:04h, 14 October

    […] particularly well at the time.Open Swing Trades going into the Weekend are as follows:2nd half of GBP:NZD swing long showing + 40 points.USD:CHF swing showing -4 points.CAD:JPY potential swing remains on […]

  • Update on Swing Trades; 18th October 2012
    Posted at 20:14h, 18 October

    […] to go searching through comments boxes to see the status of a trade.So, here goes:The 2nd half of GBP:NZD long was stopped out at breakeven. This gives a total aggregate profit of 79 points on the trade. […]