Skip to Content
News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.

Free Trading Guides
Please try again

Live Webinar Events


Economic Calendar Events


Notify me about

Live Webinar Events
Economic Calendar Events






More View More
NZDUSD Short at Market Off Upper Parallels

NZDUSD Short at Market Off Upper Parallels

What’s inside:

  • NZDUSD trading at two upper parallels
  • Turn lower would be consistent
  • Favoring entries on pullbacks in light of weak momentum

What’s driving the FX market? Find out in our trading guides.

NZDUSD has rallied impressively over the past six weeks, running higher by over 500 pips from a nearly year-long lower parallel to a pair of upper parallels. The push higher since Thursday smacks of a retest of the ‘blow-off’ type day seen back on 14th, with a key reversal-day on the 19th sandwiched in between then and now. The price action, in of itself, is compelling, but the fact this is playing out at two parallels combined with the generally mean-reverting nature of NZD and risk/reward profile gives this set-up its attractiveness.

On a secondary note, the most recent COT report shows large speculators ramping up their net long position to the highest level since before taking a dive lower in 2013.

At the time of this writing kiwi is trading at 7271. An entry at current levels with a stop placed at 7334 (above the 6/14 high) and a target of 7105 (above the 3/21 swing-day high & 200-day MA), offers an appealing risk/reward ratio closing in on 1:3. The slightly more aggressive target on this trade is to look for kiwi to trade down to the slope rising up from August 2015; momentum at the time of reaching the first target will dictate whether it is worth holding all or part of a position for the extra 50 pips or so.

For the short-term minded traders, looking for short set-ups on the 4-hr or hourly time-frame may be the preferred approach, trading within the scope of the broader idea.


Trade Criteria:

Entry: At market, near current price

Stop: 7334

Targets: 7105, ~7055 (w/momentum through 1st target)

Paul conducts webinars Tuesday-Friday. See the Webinar Calendar for details, and the full line-up of all upcoming live events.

---Written by Paul Robinson, Market Analyst

You can receive Paul’s analysis directly via email by signing up here.

You can follow Paul on Twitter at @PaulRobinonFX.

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.