Double Bottom:
The NZD/USD is forming a mini-price bottom (double bottom) in the 4H chart. This is after a week of key US data, which collectively failed to impress, though they were decent. The lack of fundamental fuel opens up room for some USD-consolidation. In the NZD/USD, this means upside toward the 0.8575-0.86 area in the upcoming week. But before of the prevailing downtrend, we should keep the bullish outlook to the short-term.
NZD/USD 4H Chart:
Reward to Risk Assessment:
Price action in the 4H chart formed a double bottom this week, Now, if there is a pullback, we should consider going long around 0.85. Give it some elbow space, and let's say we put a long entry at 0.8490. A stop low just below this week's low can be around 0.8455. The target should be limited for now to, let's be conservative and say, 0.8575. This offers a reward to risk of 85 to 35, which is about a 2.4:1 ratio. If the entry is at 0.85, the R:R would be 75:45, which is 1.6:1.
The barely decent reward to risk ratio and the prevailing bearish trend suggests we should indeed wait for a pullback to dip below 0.85 before the long entry. However, if the pullback is fast and quickly dips below 0.8480, we should look for another low before considering any bullish trade idea.
We should probably monitor the 1H chart for the entry:
NZD/USD 1H Chart:
Look for the pullback to come back to 0.8490, where we have the 50-hour SMA and a previous support pivot. Also look for the 1H RSI to dip to 40, and hold. If it can do that and start turning back up, price should also be respecting this week's double bottom, and should be helping the bullish outlook gain confidence.
Trade Safe, Trade Well!- Fan Yang
The NZD/USD is forming a mini-price bottom (double bottom) in the 4H chart. This is after a week of key US data, which collectively failed to impress, though they were decent. The lack of fundamental fuel opens up room for some USD-consolidation. In the NZD/USD, this means upside toward the 0.8575-0.86 area in the upcoming week. But before of the prevailing downtrend, we should keep the bullish outlook to the short-term.
NZD/USD 4H Chart:
Reward to Risk Assessment:
Price action in the 4H chart formed a double bottom this week, Now, if there is a pullback, we should consider going long around 0.85. Give it some elbow space, and let's say we put a long entry at 0.8490. A stop low just below this week's low can be around 0.8455. The target should be limited for now to, let's be conservative and say, 0.8575. This offers a reward to risk of 85 to 35, which is about a 2.4:1 ratio. If the entry is at 0.85, the R:R would be 75:45, which is 1.6:1.
The barely decent reward to risk ratio and the prevailing bearish trend suggests we should indeed wait for a pullback to dip below 0.85 before the long entry. However, if the pullback is fast and quickly dips below 0.8480, we should look for another low before considering any bullish trade idea.
We should probably monitor the 1H chart for the entry:
NZD/USD 1H Chart:
Look for the pullback to come back to 0.8490, where we have the 50-hour SMA and a previous support pivot. Also look for the 1H RSI to dip to 40, and hold. If it can do that and start turning back up, price should also be respecting this week's double bottom, and should be helping the bullish outlook gain confidence.
Trade Safe, Trade Well!- Fan Yang
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