Hey comdoll buddies! Check out my trade idea for this week and lemme know what you think:
There's a falling trend line on NZD/USD's 1-hour chart that extends all the way back to the last week of April so I'm hoping to catch the retest of this resistance level. I used my handy-dandy Fibonacci retracement tool to figure out where I should enter, and I noticed that the .7700 major psychological handle is close to the 38.2% and 50% levels.
However, I did note that stochastic is still pointing upwards, which means that Kiwi bulls could push this pair further up. Don't worry, I'll be waiting for this oscillator to reach the overbought zone and turn down before entering this trade. Once in this trade, I'll set my stop just above this week's top WATR and my target at the recent low of .7625.
As for fundamentals and risk sentiment, I do believe that the downbeat outlook for the markets could carry on, at least for the next couple of days. Although Greece already announced that they'd be having their elections next week, market participants seem to be pricing in the possibility of a Grexit later on.
Here's what I'm planning to do:
Short NZD/USD at .7700, stop loss at .7775, PT at .7625.
I'll be risking 0.5% of my account on this short-term trade and, if you're thinking of joining me, make sure you read our risk disclosure first.
I'd love to hear what you think of this setup so don't be shy to share your thoughts!