I'm planning a similar trade, I'm planning to go short on AUDUSD (highly correlated). I wasn't planning on posting it but NZDUSD is so highly correlated with it that its pretty much the same trade.
Here's my analysis. Take it lightly; I'm not very experienced.
I see two 'Gartley 222' Patterns on this chart. Both have convergence at 127.2 ext. of AB with 86.6 retracement of small XA and 61.8 retracement of large XA. Sorry if you aren't familiar with these patterns. I've recently learned about them and I am currently in the process of studying them and trying to find places to implement them into my trading.
Here is a link on the gartley pattern: harmonicedge.com/gartley.html]The Gartley Pattern
Also, check out the thread "30 pips a day keeps your money at bay"
On the chart above you can also see that the red horizontal line has acted as support on more than one occasion (there was another place but it got cut off on the image). The price in the area between the two thick red lines ranged back and forth for a few weeks, indicating resistance/support in the area.
Below is the chart on the 4hr time frame, showing the potential PRZ (price reversal zone) as a shaded blue rectangle. EDIT: NVM its not there. You can see the rectangle on the above chart as-well though (+ - 1.037)
As far as fundamentals, it's the end of the first half of 2012 and the month... a lot of important data is coming out this week. Tomorrow and Thursday, there is a lot of important Euro Zone data such as next months interest rate, coming out and also the NFP (non farm payrole) for the US on friday. These are pretty big events, so I believe they could make or break this trade.
Any feedback about my analysis (did I miss something big etc?), would be very much appreciated as I'm quite new to this. Thanks
this is my first post so dont judge me too bad. And I am posting from phone so no picture...
So what do you think?
Hey MrJamesPip, I think you timed your short entry perfectly but my take is that it's on a pull back not the trend. In my opinion The recent trend is bullish starting in beginning of june and I'm seeing the trend moving this higher. Also, I'm not sure how long you plan on holding but your risk/return amounts you seem to be aiming for the fences on this one. Even if this is a reversal of recent current trend or continuation of downward trend going back to July 2011 you could be holding this a while before its back to 0.7620. My opinion would be to tighten up your risk/reward and place targeted trades on the way down. Getting in and out taking profit and limiting risk at the same time. You could have safely placed your stop at 0.8100 only risking 30 pips with a reasonable 1/3 risk/return you would have taken profit at 0.7980 already and been out before it retraced back to 0.8000. Then just play those retraces if you believe it's going to continue down making smaller less risky trades. But my read of this chart is that NZDUSD will push higher in the next week or at least keep ranging. Nothing in the price action screams reversal of recent bullish trend right now. My two pips (ie cents).