Look beyond ordinary analysis
Kiwi has been declining since the beginning of September. The pair took a tumble on lower than expected growth projections, poor data on dairy prices and slowdown in China. This week we had RBNZ warning to lower interest rates once again. All this saw a huge carry unwind (KIWI is still the currency with highest interest rates among the peers).
Today, for a change, we saw better numbers from China; CPI @1.9 VS 1.6 EXPECTED, PPI @0.3 VS 0.1 expected. This might mean that not all things are bad in China yet.
Australian dollar rallied on the back of this data this morning but Kiwi lagged.
There is a low risk, very relaible pattern formed on the intraday charts.
NZDUSD made a higher high and retraced back to the support at 0.7080
The break of the most recent low 0.7020 would invalidate bullish scenario.
There is a possibility, this market has another leg down, but the fact that it didn’t decline after the Retail Sales, give me more reason to believe, the bottom is in place.
To lower the risk, I enter 50% of the position at the support @ 0.7080 and
50% on the break of the recent higher high @ 0.7130
If the price wont bounce from here, I risk only half the money
If the price will bounce off, I will add to the position
Take profit at the resistance @ 0.7230.
Risk is half of the potential reward
Trade: Buy Market
Lot Size: 0.03
Stop Loss in Pips: 80
Take profit in pips: 160
Risk of Equity: 3%
ARE THERE MAJOR RISK EVENTS TODAY/THIS WEEK: No
Is the market risk off or on? SP500, DAX, NIKKEI. Are the down or up: Not clear to me
Is this trade with the trend?: Reversal
Did I see it yesterday?: Yes
Is this a pullback measured by Fibs?: Yes
Am I buying support?: Yes
Am I selling resistance?: N/A
Is this entered during London’s session?: No
Did the price pulled back from 200MA on 15Min?: Yes
Are stochs extreme on multi charts?: Yes
Where is the price in terms of Pivots Points?: Support
Took 120 pips profit on the first position, the second is moved to break even at 0.7140
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