I have been watching this pair for more than a month. First someone showed me the class A bullish divergence, but I thought it might be just a correction. Now, we have another divergence, class B this time, forming a Double Bottom with double divergence.
Looking back half an year, the price action is by the book, with every lower low a lower high is coming, retesting the broken support. This pattern is labeled with the purple and green rectangles.
From August to November the pair was transitioning, movement was sideways, but couldn't brake the double bottom neckline at 1.1584. Same thing happened in February, test and failure, and now we are retesting the previous low, and as I said a class B bullish divergence took shape, after a class A bullish divergence. The first resistance is at 1.0616 and I really want to see it broken, in order to fully confirm my long bias.
First target is at the previous 3 highs, 1.09123. A brake over this level would make me look for the double bottom target, where we also find a great resistance level from previous support, and a very strong fibonacci cluster.
I made this chart on the run, so please excuse me if there are typos or charting mistakes!
Commentaires
Kumowizard
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Hi, this is a very interesting chart. I never really trade AUD nor NZD ag. majors as not in my trading time zone. But I have been thinking for two days now wether we shd play the NZD for short somehow. Maybe this is a good rel value pair. (I very often trade NOKSEK for example). I checked my Ichimoku setup, which also confirms that a break above 1,0865 on daily time frame would really mean a trend reversal. Only problem for now is that on 4 Hrs chart it is a bit overbought and the trend is still down. What I would like to do is to wait for a correction down to 1,0530-1,0550 area and then buy a plain vanilla Call option 3M @ 1,0800 strike. I will keep an eye on it. Thx
vlad.adrian
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Hello Kumowizard, thank you for sharing. I also looked this morning on the H4 and didn't like all the hesitation. As I said in the descreption, I want to see the pair move over 1.0616 to boost my confidence, and if it does go over, I doubt it will reach the 1.0550 area. Unfortunately, I can't say anything about the vanilla option cause I am not familiar with these new option typess, but please post here if you do buy an option so we can all learn and compare results! Good day!
Kumowizard
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Plain vanilla is ntg else but a simple directional Long Call option, where u pay the premium. So not structured at all, but u have the downside (max loss) determined in advance. Until expiry that is your stop. Of course due to the option greeks, especially Theta u must be good in timing when u take the position.
vlad.adrian
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Ahh, I see. My broker offers that too, but the strike prices are way too far, and it makes unprofitable to buy an option that you want to hold for more than a few days. If you get decent strike prices is great !
Kumowizard
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Well, in fact most of the times it is not even the strike price which matters, but how the certain broker prices the option itself, so how wide it quotes the premium for the selected maturity and strike. Even though my broker is quite competitive in OTC fx options pricing, on the majors (eurusd, chfusd, etc) I rathe trade contract options on the futures mkt. Nothing can compete with that in pricing and liquidity. However on exotics like AUDNZD, NOKSEK, EURHUF, etc. we need to pick something on the otc mkt if possible and if reasonable in terms of risks.