Awaiting Trades in NZDJPY and GBPNZD, and Others

Cory Mitchell, CMT

NZDJPY and GBPNZD are at the top of the watchlist today as they are near the edges of daily chart price structures. 

NZDJPY

NZDJPY was a huge winner taken on Sunday, hitting an 8:1 profit target early Monday morning with relative ease. 

That big move has brought the price right back to the other side of the pattern. 

The price is still moving up, so there is no trade trigger yet, but I will be watching for a consolidation to develop (then a drop below it) on the hourly, or for the price action to signal a reversal back to the downside to signal a short. In either case, once the price is showing signs of slowing or reversing, a 15-minute or 5-minute chart can be used to fine-tune a small-stop loss entry point. 

The smaller, shorter-term profit target for the trade is 65, IF that target presents at least a 3:1 reward:risk based on the entry and stop loss. We won't know that until the trade develops.

The bigger profit target is 64, closer to the bottom of the structure.

Once again there is a chance for a big reward:risk opportunity.

GBPNZD

The above trade is looking to sell NZD, and so is this trade. On some time frames the NZDJPY and GBPNZD are correlated, so be aware of overexposure to being short NZD, especially if you have other NZD trades (or trades in CAD or AUD).

The GBPNZD has two price structures going on.

Since the July swing low the price is in a rising channel. The price is currently near the bottom of the regression channel. 

Since April the price is a shorter-term channel lower, off the top of the bigger channel. The price is also near the low of that smaller channel.

A long trade has not triggered yet, but the price is slowing down on the hourly chart. 

A rally above the consolidation would signal a long. A 15- or 5-minute chart can also be used to watch for signs of a price action reversal or to attain a smaller-stop loss entry point.

Others

Other pairs near important areas include the EURUSD near the top of a month-long price structure. USDCAD is near the low of the month-long price structure, AUDUSD is near the top.

AUDNZD is still near the top of a major price structure and may be starting to reverse. Awaiting more price action signals to confirm.

By Cory Mitchell, CMT @corymitc

Disclaimer: Nothing in this article is personal investment advice, or advice to buy or sell anything. Trading is risky and can result in substantial losses, even more than deposited if using leverage.

Assume I have positions, all the time, in many pairs.

Trades are based on strategies and are not meant to be predictions. The number of trades won varies between 30% and 60% based on the strategy. My objective is to make money based on solid reward:risk ratios, not try to predict every move of the market.

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