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Catching repetitive price action via NZDUSD and USDCHF

Price action repeats

One thing that I learnt while trading using Tflow® in particular is that the market repeats itself. Previous support can turn into current resistance and vice versa. Thus if you can recognise or remember a price action the market has done before, then it is not far fetched to say that if ever this repeats, you would be able to capitalise upon it.

In these two examples, I want to point out two very common features:

  1. Previous monthly or weekly highs and lows as support or resistance.
  2. False breaks aka bull/bear trap that offer very good trading signals.

 

NZDUSD example

Let’s look at an example of this through a brief analysis of NZDUSD.

Daily Chart of NZDUSD shows price is supported by Previous Months

Daily Chart of NZDUSD shows price is supported by Previous Months

  • After a period of down, price was supported by previous 2 months of low as well as the previous year low (2013).
H4 Chart of NZDUSD shows price testing Support multiple times

H4 Chart of NZDUSD shows price testing Support multiple times 

  • On the H4 chart, we see that price tested the support several times before heading up.
  • After the initial up thrust, price retraced once more to look for support before continuing up.

 

USDCHF example

With the above pattern firmly in mind, let’s look at USDCHF to find similarities.

USDCHF H4 charts shows similiarities with NZDUSD

USDCHF H4 charts shows similarities with NZDUSD

  • Even on brief inspection, USDCHF seems like a inverted copy of NZDUSD.
    • Price has recognised previous month high as resistance and has tested it several times.
    • There was a Bull Trap/False Break/WR of previous month high.
    • After the 4th test, price has had an initial move down.
    • Price has retraced back to previous box low as resistance.

With all the pieces matching up showing that USDCHF is just a step behind, thus looking at the current NZDUSD can yield tantalising clues of what to expect for USDCHF.

This story ‘USDSGD price action: step by step guide for new traders‘ offers a comprehensive guide.

Last time, many things that I wanted were just dreams, now I see them as possibilities. I’m looking forward to own pent-house suite in Manhattan overlooking Central Park because forex trading with Tflow® makes it possible. Find me on Google+

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3 thoughts on “Catching repetitive price action via NZDUSD and USDCHF”

  1. Daniel Ku Guet Liang says:

    Thanks for sharing your insight. I was actually waiting to short nzdusd on the basis of H4 wr2b high (pending close) & H1 has bearish expansion yesterday (19Nov). Should I look for long setup instead? Appreciate your thought. Thank you in advance.
    http://www.pinterest.com/pin/403987029048649416/

    1. Jerome Lee says:

      Hi Daniel,

      Yesterday was indeed bearish. So if you believe in market symmetry then price might just come down to retest the support again. This would then create a IHS in D1 or a triple bottom in WK.

  2. Daniel Ku Guet Liang says:

    Thank you! Got it. =)

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