Free Profitable Forex Newsletter
Hey! This is Philip with this week's trade idea of the Free Profitable Forex Newsletter!
We are seeing the risk-on rally extending this week, both in stocks and risky currencies. The rate of newly infected cases with COVID-19 is gradually declining, as one of the factors supporting risky assets. The other is the massive stimulus from central banks and governments.
The US S&P 500 and the AUDUSD pair, surprising many, have both reversed more than 61.8% of the Coronavirus induced losses in late February / early March. With that said, however, aiming for the positive trend to continue is not a high probability bet either.
With 61.8% of the losses recovered, these are critical levels where sellers may enter the market again, particularly as the economic outlook remains highly uncertain everywhere.
Technical Bearish Setup On NZDUSD
In line with risky currencies, NZDUSD retraced a large part of the risk aversion moves and is now moving toward 0.62, as the next pivotal level to the upside. But, as we said above, now that the price has risen so much, the risks for a turnaround are increasing, and a larger bearish leg may be just around the corner.
This may especially be the case going into the May 13 RBNZ meeting, where the NZ central bank may introduce further monetary easing. This would put pressure on the New Zealand Dollar.
In either case, the technicals are clearly lining up in that way. Let’s take a look at the monthly and daily charts below.
The 0.62 area is an important resistance based on both the very long-term charts (monthly) and also based on the daily chart (see below). Thus, looking to establish short positions here is tactically prudent.
The area to target to the downside in such a scenario would be 0.60, near the support trendline.
- Wait for the price to move closer to 0.62;
- Look To sell there on bearish patterns on lower timeframes
Stop loss:
- Look to place the stop above the entry trigger pattern
Target:
- As noted above, the area toward the support trendline would be the target;
- that is likely to be around 0.60
Trade signals from the past week
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April 16 – Entered long USDCAD from 1.4050, targeting 1.4350 and 1.50; unfortunately the price reversed and the stop at 1.40 was hit = -50 pips
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April 29 - Short USDJPY from 106.75 (in progress)
TOTAL: -50 pips in the past week
TOTAL: +2740 pips profit since October 1, 2018
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Thank you!
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Any opinions, news, research, predictions, analyses, prices or other information contained in this newsletter is provided as general market commentary and does not constitute investment advice. FX Trading Revolution will not accept liability for any loss or damage including, without limitation, to any loss of profit which may arise directly or indirectly from use of or reliance on such information.
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