NZDUSD | Perspective for the new week | Follow-upPrice continues to play out in accordance with expectations as it moved over 300pips in our direction since my last publication (see link below for reference purposes). As the majority foretell a risk of further decline in the Kiwi in the coming week(s), I beg to take the opposite direction and maintain a Bullish bias on this pair.
Tendency: Uptrend ( Bullish )
Structure: Breakout | Supply & Demand | Harmonic (AB = CD) pattern
Observation: i. In the last 13 weeks, Buyers have found a niche around NZ$0.71000/0.70500 hereby making this area a strong Demand level.
ii. We have experienced a sharp decline in price in the last two weeks after the Kiwi hit a peak of NZ$0.74650 in late Feb. 2021.
iii. At this juncture in the market, it is impossible to ignore the pattern the decline has formed on its way down to the Demand zone - a Harmonic (AB = CD) structure.
iv. ABCD pattern with parameters explained below;
a. Leg A-to-B appears to be in harmony with the C-to-D leg.
b. The B- to-C leg falls at 38.2% Fibonacci retracement of the A-to-B leg.
c. The C-to-D leg is expected to fall within 127.2 - 1.414% Fib. ext. of the A-to-B move @ NZ$0.71000/0.70500 area.
iv. Considering the stronghold of NZ$0.71000/0.70500 area by buyers in the past, the AB = CD pattern makes a "good" reversal set-up at this juncture in the market as I anticipate a Breakout/Retest of my Key level @ NZ$0.71850 to join the rally (any area above Demand area is good for me).
v. If the price moves as expected and reaches the Supply zone, It is advisable to lock in profit to avoid getting caught up with selling pressure and note that a further Breakout of NZ$0.73000 might confirm a rally continuation.
Trading plan: BUY confirmation with a minimum potential profit of 150 pips.
Risk/Reward : 1:3
Potential Duration: 4 to 10days
NB: This speculation might be considered to make individual decisions on the lower timeframe.
Watch this space for updates as price action is been monitored.
Risk Disclaimer:
Margin trading in the foreign exchange market (including foreign exchange trading, CFDs, etc.) has a high risk and is not suitable for all investors. The content of this speculation (including all data) is organized and published by me for the sole purpose of education and assistance in making independent investment decisions. All information herein is for your reference only and I take no responsibility.
You are hereby advised to carefully consider your investment experience, financial situation, investment objective, risk tolerance level, and consult your independent financial adviser as to the suitability of your situation prior to making any investment.
I do not guarantee its accuracy and is not liable for any loss or damage which may result directly or indirectly from such content or the receipt of any instruction or notification therewith.
Past performance is not necessarily indicative of future results.
