19 Nov AUD NZD Swing Long From Support; 19th Nov 2013
Firstly I have to apologise for the lack of updates to the blog. Hopefully you will understand that my life outside of trading has been really testing over the last few Months restricting my ability to spend the time I’d like to spend on analysing and taking new trades. Despite not taking many trades, the set-ups I’ve posted over the last few Months have in the main played out very well so I hope there’s been some inspiration from those!
Despite all this I do try and have a quick flick through the charts each day and there’s always a few things I’m watching, EUR:GBP being one of my favourites at present for a potential short but it’s not quite ready yet.
Another chart I’ve been watching is AUD:NZD for a possible (short term) swing long. There isn’t a great deal on the chart making this trade convincing but I like the fact that over the last few Weeks the 1.1197 region has been cementing itself as support and this is the prime reason for having just taken a swing long entry from 1.1267 with a 120 point stop loss.
Here’s the charts.
The 4 Hourly chart shows a trend that remains to be down but with MACD currently pointing upwards (most probably corrective), and the lows coinciding with a fib extension from a previous swing move we at least have the possibility of a quick move up to clear out some shorts before any continuation of this down trend. It would therefore be nice to see a fast retrace going beyond the previous swing high at 1.1580 to grab a quick profit:
The Daily chart gives another view of this support level whilst also showing how far price has fallen from the green 200 MA. I’m not saying price wont fall further and stop me out, but in 10 Years of trade this is the longest period of time the Daily chart has stayed away from the 200 MA, again giving a possible upside target for any imminent retrace.
The Weekly chart again reiterates this support area and shows a number of previous occasions where price has reversed at this level. Those reversals are generally short lived, but I’m not too worried about that. The aim here is to take a quick profit from what in essence is a relatively tight and well defined stop loss just below support. Again its worth noting how far price has moved from its green 200 MA which is unusual for this pair based on historic standards:
The obvious risk with this trade is that price is in a clear down trend and a professional trader would probably be looking to short retraces rather than taking an against the trend position. However despite no convincing MACD divergence to suggest a low is in place, price is clearly oversold and retraces from such levels can be quite powerful. I think within 24 to 48 hours we’ll be able to see whether this trade is likely to have any legs.