NZDCAD - Long Trading Idea on the 4h Charts.
Introduction:
This is mostly an update on a trading idea we published a couple of weeks ago.
As it's clear on the 4h chart, FX:NZDCAD has been comfortably ranging between 0.89000 to 0.93000 since mid November of 2018. Although it is a minor pair, meaning its moves are fundamentally based on each currency's performance across the whole forex markets (particularly against the US dollar), an in-depth market analysis suggests that this range might continue for a while, since volume is still low.
As we previously suggested in the last trading idea, it would continue down from the price level we found ourselves in. It did, creating a narrow downwards channel (dotted trendlines) that, even though suggested a continuation pattern, bounced comfortably from the support and broke the channel. Following a couple of NZD bearish news cycles and a market-perceived Hawkish FOMC meeting, it retested the channel from the other side, was rejected and is now in a thin range on the 4h charts.
As there is still no sight of a strong trend forming on either NZD or CAD to make us believe this ranging condition is changing anytime soon, a long trade here represents the best risk-reward ratio for us to take.
How to Proceed:
Our team has already opened a long position on this level, with another pending long order on the support level, at 0.88800.
Take Profit:
Our take profit targets are 0.91200 and 0.92250, both presented on the charts as resistances. They can be dynamically changed, i.e., according to live price action, should circumstances alter.
Stop-loss (Invalidation of Analysis):
Our stop-losses here are below this ranging structure, in the 0.88600 levels. Remember that price tend to repeat itself over large timeframes and that a too tighten stop-loss, while seemingly more risk-verse and safe, could prevent you from taking profit on the longer term. Adjust position sizes accordingly.
Please leave your comments below to inspire us to continue our work and don't forget to follow us! Have a great trading session!
This is mostly an update on a trading idea we published a couple of weeks ago.
As it's clear on the 4h chart, FX:NZDCAD has been comfortably ranging between 0.89000 to 0.93000 since mid November of 2018. Although it is a minor pair, meaning its moves are fundamentally based on each currency's performance across the whole forex markets (particularly against the US dollar), an in-depth market analysis suggests that this range might continue for a while, since volume is still low.
As we previously suggested in the last trading idea, it would continue down from the price level we found ourselves in. It did, creating a narrow downwards channel (dotted trendlines) that, even though suggested a continuation pattern, bounced comfortably from the support and broke the channel. Following a couple of NZD bearish news cycles and a market-perceived Hawkish FOMC meeting, it retested the channel from the other side, was rejected and is now in a thin range on the 4h charts.
As there is still no sight of a strong trend forming on either NZD or CAD to make us believe this ranging condition is changing anytime soon, a long trade here represents the best risk-reward ratio for us to take.
How to Proceed:
Our team has already opened a long position on this level, with another pending long order on the support level, at 0.88800.
Take Profit:
Our take profit targets are 0.91200 and 0.92250, both presented on the charts as resistances. They can be dynamically changed, i.e., according to live price action, should circumstances alter.
Stop-loss (Invalidation of Analysis):
Our stop-losses here are below this ranging structure, in the 0.88600 levels. Remember that price tend to repeat itself over large timeframes and that a too tighten stop-loss, while seemingly more risk-verse and safe, could prevent you from taking profit on the longer term. Adjust position sizes accordingly.
Please leave your comments below to inspire us to continue our work and don't forget to follow us! Have a great trading session!
