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.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
EUR/USD
Bullish
Oil - US Crude
Bearish
Wall Street
Bearish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Gold
Bearish
GBP/USD
Bearish
USD/JPY
Mixed
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
More View more
Breaking news

British Pound sinks as EU Brexit negotiator Barnier says there may not be an EU/UK deal

Real Time News
  • Adds that some EU member states have become jittery as the Brexit endgame nears $GBP
  • EU Diplomat says still unclear if negotiators can bridge gaps on 3 key issues $GBP
  • Heads Up:🇬🇧 BoE FPC Meeting due at 09:30 GMT (15min) https://www.dailyfx.com/economic-calendar#2020-12-02
  • 🇮🇹 Unemployment Rate (OCT) Actual: 9.8% Expected: 9.9% Previous: 9.7% https://www.dailyfx.com/economic-calendar#2020-12-02
  • 🇮🇹 Unemployment Rate (OCT) Actual: 9.8% Expected: 9.9% Previous: 9.6% https://www.dailyfx.com/economic-calendar#2020-12-02
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 94.23%, while traders in EUR/USD are at opposite extremes with 76.39%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/tOPLdyRuXM
  • Heads Up:🇮🇹 Unemployment Rate (OCT) due at 09:00 GMT (15min) Expected: 9.9% Previous: 9.6% https://www.dailyfx.com/economic-calendar#2020-12-02
  • The continuity seen across these volatility cycles is a good thing. Historical precedence offer a blueprint for identifying conditions supportive for a vol-event to occur, and how they may unfold. Deepen your knowledge of historical volatility here: https://t.co/vg7w10la3j https://t.co/5GU4pInyEz
  • Commodities Update: As of 08:00, these are your best and worst performers based on the London trading schedule: Gold: 0.12% Oil - US Crude: -0.06% Silver: -0.42% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/Or5dlWpp5V
  • Oil - US Crude IG Client Sentiment: Our data shows traders are now net-long Oil - US Crude for the first time since Nov 17, 2020 when Oil - US Crude traded near 4,158.50. A contrarian view of crowd sentiment points to Oil - US Crude weakness. https://www.dailyfx.com/sentiment https://t.co/PfSmrjovuW
A NZD/JPY Breakout with "Phenomenal" Profit Potential

A NZD/JPY Breakout with "Phenomenal" Profit Potential

2013-11-22 19:55:00
Kaye Lee, Head Forex Trading Instructor
Share:

Talking Points:

  • Real or False Breakout in NZD/JPY?
  • Bounce off Rising Support Level
  • The "Magnetic" Support Zone for Initiating New Longs

The weekly chart of NZDJPY is now at an extremely interesting juncture. Last week, price broke out of a triangle consolidation pattern with a strong bias to the upside, as seen below.

Guest Commentary: NZD/JPY Breakout in the Making

A_NZDJPY_Breakout_with_Phenomenal_Profit_Potential_body_GuestCommentary_KayeLee_November22A_1.png, A NZD/JPY Breakout with "Phenomenal" Profit Potential

This week, prices have come back to retest the broken line of resistance as potential support. Given that it is already Friday, the result of this test should come either today or early next week.

If the break is real, then the projections for profit would be phenomenal. If it is false, then there is a generous amount of space to the rising line of support for intraday traders to profit from. Either way, this broken trend line is a promising hair-trigger set-up for volatility to come.

The daily chart below shows a rising line of support from a triangle of its own. As price heads down to test the support level of this triangle, traders will have an opportunity to ride the move upwards on the bounce, hopefully into a prolonged weekly trend.

Guest Commentary: NZD/JPY Bounce off Rising Support

A_NZDJPY_Breakout_with_Phenomenal_Profit_Potential_body_GuestCommentary_KayeLee_November22A_2.png, A NZD/JPY Breakout with "Phenomenal" Profit Potential

Of course, if a false breakout scenario develops, then the result should come just as swiftly, and future trades would be premised on a short bias.

However, because of the breakout, the weekly bias is long, no matter how precarious said breakout may be looking. After all, it is when most traders feel the greatest fear that the most profit is to be made. Thus, the trade is best designed using the daily rising support as an entry tool into the market.

Eagle-eyed readers would have realized that there are several ways to draw the rising line of support on the daily chart. Some would be more aggressive with steeper slopes, and some would be more conservative, using gentler ones.

Normally, this would not be a problem, but due to the potentially large variance in this case, the key zone of support is derived from a previous congestion area of price on the four-hourly chart. Thus, the support zone is 81.48-82.13.

Guest Commentary: Key Support Zone for NZD/JPY

A_NZDJPY_Breakout_with_Phenomenal_Profit_Potential_body_GuestCommentary_KayeLee_November22A_3.png, A NZD/JPY Breakout with "Phenomenal" Profit Potential

Although the four-hour chart has already given a long pin bar recently, there is a fairly reasonable chance of it coming down to this area, as congestion zones of this sort tend to be almost magnetic in nature. In fact, some believe that the previous equilibrium point between the bulls and bears must be retested to verify a higher-time-frame breakout.

Of course, the trade may just shoot up suddenly, in which case there will not be a problem, and we can move on to the next trade. However, if it turns out to be the low as price rises to confirm the weekly breakout, then this would be a very rewarding trade, indeed.

The trade should be taken on the hourly chart (not shown) on a pin bar, bullish engulfing pattern, or bullish reversal divergence. As this is a trade in the direction of the trend, there is no need to keep risk less than usual, as long as traders have prepared their accounts to take two or three tries at getting into a profitable move.

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

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

DISCLOSURES