NZDUSD: Ready to Resume the Bearish Trend?
The NZDUSD is in an attractive technical position. Could provide a nice short trade.Technical Analysis Position and Developments
The NZDUSD is retesting the main falling trend line for the overall long term bearish trend, that started from July 2014 top. As shown on the weekly chart above. In addition to the broken rising trend line for the latest pullback structure(dashed red line).
Last week, the NZDUSD has formed a shooting star candlestick pattern at the confluence of those two trend lines. The main falling trend line for the downtrend, in addition to the shorter term rising trend line for the pullback.
Over the daily chart, NZDUSD has formed a potential double top pattern at the confluence of the 200-days simple moving average, and the 50-days simple moving average. And currently retesting the neckline of the double top, which meets the rising trend line for the short term upside pullback around 0.6560.
Momentum has already broken down, as shown on RSI breaking its rising trend line and last swing low. Should the price break-down?
Trade levels & Risk-Reward
As the NZDUSD is retesting a major long term trend line, there is a good chance that we get a move lower to resume the overall trend. We are looking to short at the just near the 200-days simple mvoing average at 0.6670, targeting 0.6560 as an initial conservative target. And a second target at 0.6350.Trade Levels: Short at: 0.6670 // Target 1: 0.6560 // Target 2: 0.6350 // Stop loss : 0.6760
Average risk-reward for the trade is approximately 2.4.
Make sure to read the trading rules here…
Disclaimer: All trade ideas are hypothetical and only for illustration and educational purposes.
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