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NZDUSD – Why we love and hate retracement

In my earlier post on NZDUSD, titled NZDUSD – RBNZD intervention and how do we profit from it? I suggested that NZDUSD to retrace much higher and to really wait for the retracement to complete before a short can materialise.

Price went on retracing towards key level 0.8030 (round number resistance 0.8000).

Question: Is NZDUSD ready to resume it’s downwards movement? I conducted a Best Practice Class this week, suggesting that NZDUSD is due to resume downwards movement on these arguments:

It has reached a strong resistance level (round number 0.8000) and some historical levels.


Resistance levels


Price has retraced to form a 1234 pattern. ED channel and F6 acting as support now.


1234 pattern, with ED channel and F6 as support


There might be 2 scenarios:

1. A clean break of ED channel and F6, which I will put a buffer, thus, price has to close below 7820 and I mean strictly 7820 (minimum 15 pips buffer)

2. Price might retrace again. Negative swap is the key reason why I’m insisting on a clean break.  Then it will be “here we go again”


A possible retracement if support don’t get broken

#tflow wk 43/2 $nzdusd below 7820 has S 7720 (previous low) and probably 7400 as suggested by this post NZDUSD – RBNZD intervention and how do we profit from it? *big smile* 

Updated by Binni Ong 29 Oct 12.35am

Price closed below 7820 in H4, but there was no d1 close.

I suggested in my posting that NZDUSD might retrace more. Indeed it is retracing. I would be mindful of any H4 close. Instead i will look out for D1 close.


1234 and interaction between timeframes


Update by Binni Ong on 30 Oct 1.36am

I’m really not suitable for late night posting. Read what I wrote last night. Oh…

Price closed above 7903 F3 on D1 timeframe.

This is a stop loss of about 100 pips. I have used this level to trim about 50% of my positions. However, pt 4 has not been compromised. Thus I am still put a hard stop 15 pips above pt 4. In order to increase my stop without incurring more than what I originally calculated as a potential loss, I have again trimmed another batch of approximately 30% on top of the 50% I cut out this morning.

NZDUSD is slightly trickier because of a potential double-whammy; both with FOMC and RBNZ data release.

However, I will still be looking to short when signal are clearer towards my final number 0.74.

Updated by Binni Ong on 3 Nov 4.45pm

In my post above, I wanted a day close on NZDUSD below 0.7820 to firm up bearishness.  With this, I hope that 0.76 as an intermediate support will come true. Ultimately I’m still looking at 0.74, but due to negative swap, I don’t have to stay too long, so will be locking in at each strong support level.

#tflow wk 45/1 $nzdusd below 0.7820 has S 0.7600


NZDUSD week close below 0.7820

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