03 Mar GBP NZD Analysis Ahead Of Long Entry For W/C 5th March 2012
There are a few charts I’d like to post ahead of Sunday Night’s FX Market Open and I’ll start with GBP:NZD
If there’s one thing that can be said about the New Zealand Dollar, it’s been one of the best Trending Forex Pairs during recent times. I say the best, because although other pairs have trended reasonably well, the New Zealand Dollar does so smoothly without huge whipsaws. There are certainly a few NZD pairs that I regret not participating in.
For GBP:NZD the 15th Decmember 2011 high down to the 15th February 2012 low captured a 2000 point move with the largest retrace being just 350 points. Nice if you can get it!
For the last 3 Weeks price has been forming a possible bowl shaped rounded bottom. I do find these long winded rounded bottoms difficult to trust but the advantage of them being you can usually spot very quickly when your trade is wrong and get out with minimal damage.
The 4 hourly chart shows an attack at the previous swing high which now combines with the 23.6% Fibonacci Retrace and all moving averages now pointing up with support offered by the green 200 MA, alongside positive MACD divergence. The 38.2% Fib retrace would probably be a fair initial upside target with stop loss below 1.8760 depicted by the first higher low on the chart below:
The daily chart found resistance at the pink 50 MA on Friday, whilst the 20 MA is now turning up. It’s possible we may see consolidation between these 2 MA’s for a couple of days, but due to the trending capabilities of this pair it’s also possible that next Week’s direction will be cemented as soon as the Markets open – look at the lack of protruding wicks on the Weekly candle’s whilst it’s trending to get an idea of what I mean here.
Here’s the Daily chart:
Finally the Weekly chart which shows price within a long term falling wedge and long term positive MACD divergence. MACD can diverge for a very long time and we are playing a counter trend move here, but if the counter trend move really does get traction we can keep an eye on this wedge as a guide: