24 Mar This Week’s Round Up & NZD:CHF, GBP:USD & GBP:CAD Overview; 24th March 2013
I put so much energy into day trading the volatility over the last Week that I actually missed out on some reasonably good swing trade set-ups that were previously discussed here. One of those was AUD:USD for a swing long, I actually entered that position but got frightened out of it for a small profit as the markets became quite uncertain and jumpy surrounding Cyprus and Europe news.
Day trading was very good to me all Week, until the last 15 minutes on Friday which quickly undone much of the success… why on earth I still had positions open that late I just don’t know; its not the first time a Friday night spike has caught me out, but I’d entered shorts on U.S indices and fully expected a bit of a move down in the dying minutes of the session as surely there would be profit taking ahead of the various Weekend votes trying to sort Cyprus out. It seems the markets are so confident Europe will bail Cyrpus out they don’t even entertain the possibility of it all going ‘Pete tong’, which it will, one day. Until then the market is of course right to go as high as it wants!
Anyway, I’ve revisited some of the recent charts and following a comment from a reader suggesting I look at NZD:CHF I’ve done that too, and am quite pleased with what I’ve found, so thanks for pointing that one out ‘Flashman’.
At first glance, NZD:CHF just looks like random chop that’s not even worth a second glance and to be honest I wouldn’t have given it a 2nd glance had I not been prompted to.
To get the best out of this first chart you need to ignore anything prior to August 2012. In doing so you can see the last 6 Months of price action has formed an ascending triangle. Some people will call it a bearish rising wedge, but my experience says it isn’t. It’s not a bearish rising wedge because its not steep enough and I’ve seen many of these and at this angle most tend to break to the upside. Therefore, my opinion is the chart is bullish and we have an initial upside target of 0.8208 which sits around 350 pips above the current print. 0.8208 was a strong support zone from 2006 to 2008 and could soon become initial resistance on a move higher:
Looking at that chart you may be inclined to think amongst all that chop no real pattern exists. Maybe it doesn’t, but to me it looks more like an ascending triangle than any other possibility so I’ll stick with that view until proven wrong.
To make the bullish assumption more viable we need to look at historic patterns from the same pair in order to understand how they played out. That was a relatively easy task because in this chart below we can see an identical consolidation pattern from 2010, even the MACD pattern is similar, and the result looks exactly how I’d expect the outcome of the current pattern to end:
Based on these charts alone, I’d be quite interested in getting positioned in this pair, but probably on a futures contract to reduce the financing costs as it could take some time to play out.
Moving onto a revisit of GBP:CAD and GBP:USD
This GBP:USD chart needs to be viewed in conjunction with the longer term chart from this post to ensure you are aware of the other possibilities here, but in the shorter term a short entry from resistance in this chart is quite likely to deliver at least some kind of trade-able pull back even if it doesn’t kick Cable back into its longer term downtrend at the first attempt. Again, I’d be interested in entering a short from 1.5350 resistance:
Finally, another look at GBP:CAD initially discussed here. I did say a long from the bottom of the 3 year range didn’t appeal to me. I also said I’d probably regret not taking the trade. And I do! Nonetheless it has rallied quite hard and I still don’t fancy getting long, but will still watch out for a potential short entry that may take us hard through that support on a further attempt. You may also notice the rebound has been a lot swifter than previous ones and this does suggest at least another visit to that support may be on the cards:
As always if I take any of the trades discussed I’ll post details in the comments section under the relevant post and as always the trade will be posted live on my ADVFN forum. In the meantime, thank you to everyone who supports the time I put into the blog whether that be through comments or signing up for a free ADVFN account through my sponsored affiliate link.
I hope your trading is going well!