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].

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