- NZD/USD bears comeing back to the tabel for more.
- A 1:3 R/R trade opportunity has been identified on the 4-hour chart.
Further to yesterday’s analysis, NZD/USD Price Analysis: Bears in play below recent highs to 38.2% weekly Fibo, with the trade running at breakeven and in profit, subsequent price action opens prospects of bearish opening.
For a recap, the objective was to the weekly 38.2% Fibonacci retracement of the W-formation’s bullish impulse that is still yet to be achieved:
Current price:
Daily chart
In yesterday’s analysis on the daily chart, pictured above, the wick was cited as an opportunity to fill in on a short positing on the 4-hour time frame as follows:
The price has subsequently moved in the expected trajectory to put the positing into positive territory and enable the stop loss to be moved to breakeven for a risk-free trade towards the target.
However, that is not to say that there the train has left the station.
The market is consolidating and is testing old support which is anticipated to act as resistance:
While a 38.2% Fibo retracement of the bearish impulse can not be ruled out to 0.7084, there are strong volumes just below it and around the 10-day moving average.
In fact, there is a high level of liquidity between there and 0.7053 which could all act as resistance.
This offers those not already short, or bears that wish to add to the breakeven position an opportunity.
A set up can be taken from today’s session highs on a sell-limit with a stop-loss above structure.
The stop placed at 0.7092 would be above volume, the daily 38.2% Fib as well as the 4-hour 21-moving average and yesterday’s session’s point of control.
With a target set to the 38.2% weekly retracement level, the setup would offer a 1:3 risk to reward in technically bearish conditions.
