Tuesday, October 11, 2016

NZDUSD - 11/10/2016

 It looks like the decline of the Kiwi continued from last week and aiming 0.695 critical support level. The drop from the 0.784 top so far looks like a three wave pattern. Funny thing is that above 0.695 I cannot rule out the correction because the Fibonacci 161.8 expansion level (usual expansion of a wave 3) is right there. 
NZDUSD - Daily chart

Last Friday's price action looks like a nice pause on the daily time frame. The bulls failed to make a reversal. Yesterday there was bearish slingshot momentum configuration setup on the 1 hour chart, which was followed by a nice signal candle. The slingshot was a strong 8 candle setup and occurred in lower blue zone which is the first support zone in a bear trend.

NZDUSD - 1 hour chart
This setup offered high return with low risk. I opened a short position at 18:18 (GMT+2). EP was @ 0.7133 Sl was 0.7149 (above the left leg of the slingshot). My first target zone is 0.701. This is very I plan to scale out 1/3 of the position. If the decline continues to the 0.695 support level I will scale out another 1/3 of the position.

NZDUSD - 4 hours chart
The higher time frames also supported this bearish setup.  The momentum of the 4 hours chart reached the sustainable bearish zone and pull back only pushed the RSI up to the first bearish support zone. After the setup got triggered the market kept declining and reached a new low. I pulled my Sl lower to 0.7115 which is just a little bit below of what I think is wave [1] of (v) of [iii].

Friday, October 7, 2016

NZDUSD - 07/10/2016

My short position got stopped out @ 0.7177 with +107 pip. 

NZDUSD - 4 hour chart
 
The kiwi pierced below the mutual target zone (marked with small blue rectangle) and reversed from there. Until this moment both bear and bull scenario pretty much had the same road. Now the NZDUSD reached an intersection and most likely we'll see the direction in the next 1 or 2 weeks. I decided to rule out the complex flat scenario on the 4 hours time frame mentioned in my earlier posts. 

So my bearish version suggests that an ending diagonal pattern in wave C position is completed and a price will turn down to at least 0.632 level. My (down to earth) bullish version says that the ending diagonal is incomplete and the decline from the 0.784x top is a correction and a new high will come.

It's important to note that the price only break below the first support level of 0.72 and looks like the market is testing it right now. The key level still lays around 0.697X. The momentum of the daily time frame is at the bullish support zone, but I think the bulls lack the support of the higher time frames and below the daily time frame the momentum looks really bearish. Thus I will prefer the bearish context and next week I will try to seek signaled short setup if the PA stays below the 0.731 high.

Thursday, October 6, 2016

NZDUSD - 06/10/2016

The kiwi reached the lower line of the small rectangle which marks the zone where reversal may occur. I can't see any reversal signal so far, but I decided to lower my stop loss order. The decline on the 1 hour time frame switched to channel mode after a nice sharp drop. The RSI on the 1 hour chart ( and also on the 15 minutes time frame) turned down from bearish support. 
NZDUSD - 4 hours chart
NZDUSD - 1 hour chart

Wednesday, October 5, 2016

NZDUSD - 05/10/2016

I still think that the Kiwi is more likely creating a ZZ pattern as I mentioned in my previous post.
NZDUSD - Daily chart

Some items from the cons and pros list is checked. First of all the top line of the corrective channel behaved as a resistance. The price action on the weekly and daily chart is still form a wedge, EWP wise it looks like and ending diagonal pattern. The test of the lower line was successful. 

The RSI on the weekly time frame has not reached the sustainable bullish zone and toped at the limit of the bearish resistance zone, while the daily RSI reached the sustainable bullish zone for one period and turned down and right now at the bullish support. The momentum of the 4 hours time frame looks bearish to me. All local low reached the sustainable bearish zone while the pull backs stopped in upper grey zone.

NZDUSD - 4 hours chart
The first bigger support level is pierced while last week the price was above it. Although I still cannot rule out that a strong pull back may come in a bearish scenario as well. I marked a small rectangle which is the maximum zone of a complex flat correction. Below this zone I can only think of one immediately bullish scenario. The 1-2-i-ii patterns sometimes form a triangle. So the correction from 13th of September until the 4th of October formed a triangle. Triangle can only be in wave IV, X or B position. So if this is an actual triangle patter then the price should reverse from the lower zone of the small rectangle. This would be and ideal price target for a thrust after a triangle pattern. This scenario may be ruled out below 0.7050. So reversal above 0.714  would suggest at least a strong pull back to 0.737 or that the ending diagonal pattern is most likely incomplete and a new high is still needed. We'll see...