🤯 Have you seen our AI stock pickers’ 2024 results? 84.62%! Grab November’s list now.Pick Stocks with AI

A GBP/NZD Set-Up That’s Happening As We Speak

Published 12/03/2013, 01:29 PM
Updated 07/09/2023, 06:31 AM
AUD/CHF
-
GBP/NZD
-

Talking Points:

  • Classic "Buy the Dip" Set-up
  • End of a 5-Wave Elliott Pattern for GBP/NZD
  • A Viable Entry Opportunity Happening Right Now

The AUD/CHF trade we highlighted yesterday worked out very quickly, and now today, we’ll look for a similar result from a GBPNZD set-up, although this trade goes in the opposite direction as the AUDCHF one did.

The daily chart is very straightforward, as price is in an uptrend and is pulling back towards support for a possible bounce.

Pullback in <span class=GBP/NZD Uptrend " title="Pullback in GBP/NZD Uptrend " align="bottom" border="0" height="363" width="680">

On the four-hour chart below, we see a potential completion of an Elliott wave pattern. The five waves up are clearly marked, and the pullback has been two-legged, with the support zone marking potential end points for the c wave.

End of a 5-Wave Elliott Cycle for <span class=GBP/NZD " title="End of a 5-Wave Elliott Cycle for GBP/NZD " align="bottom" border="0" height="362" width="680">
In this case, a reasonable support area has been derived from previous resistance levels visible on the four-hour chart. Together, the final support zone is 1.9742-1.9866.

As traders will note, price has already begun to flirt with the support area and may be prepping for a move already.

The trigger would be a bullish pin bar, a bullish engulfing pattern, or a bullish reversal divergence on the hourly chart (see below). At the time of writing, the first bullish pin has already formed, as shown.

<span class=GBP/NZD Entry Opportunity Happening Now" title="GBP/NZD Entry Opportunity Happening Now" align="bottom" border="0" height="362" width="679">
The first entry would have been near the 1.9905 level, and those who are able to hop on at this level on a price pullback can probably still get on this move. If not, the other option would be to wait and see if price pulls back to the support zone for another swipe before heading upwards.

This is trend trade, so the set-up should be traded at full (but controlled) risk. Those who are unable to get in on the first entry should take solace in the fact that many of these trades do give a second entry opportunity. Of course, what happens next is entirely in the market's hands.

By Kaye Lee, private fund trader and head trader consultant, StraightTalkTrading.com

Latest comments

Loading next article…
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.