This week we’re looking at four markets: EURUSD, EURCAD, EURNZD and NZDUSD.
The shared currency has had a lacklustre 2018 so far, and whether you feel the consolidation is best represented by the box I’ve drawn in, or the wedge structure, your conclusion is the same: Nothing much to see here.
We need price to break. I find Friday’s bounce off the lower trendline very interesting, because if that bounce fails, we’re probably in for a clear move to the downside. For now, I’m on the sidelines.
I’d like to see the EURCAD limp up to 1.5750 – 1.5850 and then fail. Horizontal support has failed, dynamic support has failed (the trendline), and the pair printed an attempt at a head and shoulders up there. Sell down to 1.5350.
The EURNZD broke out of its consolidation early last week and continues to look weak. I zoomed out a little on this chart because when I do that, some hefty targets come into view: 1.6150, 1.5330 and 1.5100, nearly 1800 pips away. I would like to see an attempt at a retest from below – because a retest and failure suggest that price is ready to fall, and not climb back into its multi-month consolidation.
The structure I’m seeing on NZDUSD remains bullish, right up until support at 0.7200 fails.
Perhaps we’re seeing a consolidation like this:
Or alternatively, we could consider something where 0.7200 has held (the move lower being a fakeout) and even aggressively move the upper trendline in to show that a breakout has already happened:
A long trade on either setup is more or less the same – wait for price to trade and close higher than Thursday’s candle (the bearish one that spiked higher), stops below Friday’s low and target at least 0.74 (assuming we get a 1R trade out of it).