FX Swing Trade Setups

The  New Zealand Dollar seems to be back in its track. After sizeable consolidations versus the US Dollar, Euro, and British Pound, the Kiwi is rapidly gaining momentum across the board. Today’s article will review some of the Kiwi crosses and decipher which pairs could be the most appealing.

GBPNZD LONG TERM

The GBPNZD long-term down tend could be back in play. The upside correction lasted 43 weeks (from April 2013 to January 2014), but now the bears seem to have wrestled back control.

27- 3- 2014 gn w

Here are the most interesting observations:

1)      First things first: the trend channel. The weekly channel (blue) is confirming the long-term bearishness of the pair

2)      Most recently the GBPNZD broke below the support trend line (green)

3)      The corrective formation took the shape of a rising wedge chart pattern (both green lines)

4)      The first Fibonacci retracement level (orange) was respected at the 61.8% but the currency missed the -27.2% target

5)      The second Fibonacci retracement level (magenta) was respected at the 78.6%

The target on the weekly chart is for the moment the -27.2 target at 1.7430, although one must be cautious of the bottom as well.

DAILY TRADE SETUP

On the daily chart the most important elements to mention are:

1)      Price is breaking the -61.8% target as I am writing this article

2)       There is a daily support level at 1.8860 to be aware of

27- 3- 2014 gn d

The best trade to me seems to be to wait for the retracement of today’s daily candle and this week weekly candle. The stop loss needs to be tight because using the daily top would literally mean a stop loss of 1,000 pips, which would be somewhat exaggerated! Usually speaking during downwards momentum, each candle makes new lows and highs, so the best stop loss choice is this week’s weekly high (orange line) at +/-1.9370.

A move back up towards the 1.9240-1.9270 level would give a decent stop loss size. The target for this daily downside would the first magenta support line at 1.8860. [tweetable alt=””]The reward to risk ratio of the 1.9240 entry is 380 pips reward versus 130 risk for almost a 3:1 r:r trade setup. [/tweetable]The higher entry would be 410 versus 100pips for a 4:1 r:r. Interestingly enough, 30 pips difference can alter the balance from 3:1 to 4:1.

EURNZD

The EURNZD seems to be in the same boat. It is in fact falling even faster than the GBPNZD at the moment and has already reached the support level (orange). Here a retracement of this week’s weekly candle with a stop loss above this week’s high would seem ideal.

The targets for the downside are the Fibonacci targets of the -27.2% and -61.8% at 1.5540 and 1.5080. The latter target is equal to the bigger bottom as well.

27- 3- 2014 en

What do you think of the NZD currency pair? Are you interested in trading it? Is there another pair not mentioned here that you find interesting as well? Let us know down below in the comment section!

Thank you for sharing this article with others and Happy Trading!

The following two tabs change content below.
Winners Edge Trading was founded in 2009 and is working to create the most current and useful Forex information and training available on the internet.

Winner’s Edge Trading, as seen on:

Winner's Edge Trading in the news