13 Dec Trading Update – Entered GBP NZD Swing Long
Ok, so I promised an update of charts I was watching with a view to trading this Week, but unfortunately due to a sickness bug I was unable to do so, and that also unfortunately meant missing out on taking a couple of nice trades.
A couple of set-ups didn’t materialise until today so I’ll discuss one of them here.
Following on from previous GBP:NZD analysis, today I entered a long position as price broke through the 38% fib retrace level for the 3rd time in a Week and stop loss is currently set at todays low.
The big question though, would I enter this position right now had I not entered it earlier on? Probably not is the answer mainly because this pair can move very quickly at apparently random levels….. 50 – 100 pip moves in the space of a few minutes is not uncommon and therefore I want risk Vs reward to be very tight when trading this pair, and I don’t think the current price level when assessing risk of failure is a particularly safe entry, but that decision is down to the individual trader and their own analysis of the potential reward on the trade.
Potential short term targets are the 61.8% Fib retracement level and ultimately the gap you can see at the top left of the chart, which I’m sure will eventually get filled, noting also that the fill of this gap coincides with the Monthly 20MA so we’ll probably have resistance there. See here for previous detailed charts.
In view of the rounded bottom which has given rise to a “Cup” formation, we could potentially see a pull back to form a “handle” which would offer a nice Bullish Cup and Handle long entry if you are not already in long positions.
Note that GBP:NZD does tend to trade inversely to U.S stock Indices, so for further confirmation of a particular trade it is always worth taking a quick look at the S&P 500.