[B]My picks:[/B] Pending NZDJPY Breakout
[B]Expertise:[/B] Combining Money Management with Fundamental and Technical Analysis
[B]Average Time Frame of Trades:[/B] 3 days - 1 week
Risk trends have suffered dramatic volatility this past week; and the result to this point has been dramatic breaks that could turn medium-term trends (that is if momentum finally accompanies the increased activity). For my setup from last week, the dramatic reversal in sentiment cut short a strong, technical CADJPY trade - but not before my position adjusted to secure profit. After a sharp, four-session decline, the pair finally lost momentum and turned for a rebound. In taking this position, I knew that it could be a temporary rebound before the market looked to sustain a new bear trend or it could be a true reversal to hold to the very consistent 5-month risng trend channel. Ultimately we saw the former. However, the rebound would hit my first target, prompting me to trail the stop on the second half of the trade and gaurantee a profit.
This week, there are major trends among the yen crosses trying to gain a footing; but their path is unclear. So, instead, I will defer to awaiting true direction from a breakout. Despite the activity in this this underlying fundamental them, NZDJPY has maintained an unnaturally consistent congestion pattern between 60 and 63.35. A break to the upside would have to confirm a move above the 63.35 double top and the long-term 50% fib retracement of the May 2008 to Feb 2009 bear wave. On the opposite side of the setup, there is a lot of support in the way. There is a prominent fib, pivot confluence loosely at 60. However, the rising 50-day SMA and closely watched trend from Feb 17’s low at 58.75. An aggressive entry can look for a close below 60 and a conservative entry would be a close below 58.50. For now though, we need to concern ourselves with what could catalyze such a breakout. Aside from a sudden shift in risk trends; New Zealand will soon release its quarter trade numbers and 1Q GDP figures over the next 48 hours. We should watch the market through these notable releases.