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
Mixed
Oil - US Crude
Bullish
Wall Street
Mixed
Gold
Bullish
GBP/USD
Mixed
USD/JPY
Bearish
More View more
Real Time News
  • BoE Governor Bailey: - Economic picture has been mixed since September as Covid resurges - Little evidence to go on for impact of January lockdowns $GBP
  • Forex Update: As of 17:00, these are your best and worst performers based on the London trading schedule: 🇨🇦CAD: 0.68% 🇳🇿NZD: 0.56% 🇦🇺AUD: 0.56% 🇬🇧GBP: 0.13% 🇨🇭CHF: -0.11% 🇪🇺EUR: -0.12% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/ZtmzE3dmEy
  • Indices Update: As of 17:00, these are your best and worst performers based on the London trading schedule: US 500: 1.15% Wall Street: 0.59% FTSE 100: 0.09% Germany 30: 0.08% France 40: 0.05% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/kCbRldWQS1
  • Joe Biden is officially sworn in as President of the United States.
  • Joe Biden sworn in as 46th President of the US. $USD
  • Heads Up:🇬🇧 BoE Gov Bailey Speech due at 17:00 GMT (15min) https://www.dailyfx.com/economic-calendar#2021-01-20
  • $EURCAD fell from around 1.5440 to around 1.5300, hitting its lowest level since early July, following no change to BoC's policy and a press conference from BoC Gov. Macklem. $EUR $CAD https://t.co/UUmfalRbef
  • $EURUSD is bouncing between well-established technical levels - to the upside the midpoint of the pair's historical range and head-and-shoulders neckline. Downside, 38.2% Fib of past three months run and 50 DMA https://t.co/v5Ly5Ctnvj
  • BoC Governor Macklem: - Rise in Canadian Dollar does pose some risk - We don't target the Canadian Dollar - Most appreciation in Canadian Dollar is coming from broad-based depreciation of US Dollar #BoC $CAD
  • BoC Governor Macklem - Micro-cut is one option available to the BoC - If we see further appreciation of CAD that will become more of a headwind and that presents downward risk to our projections $CAD
2 Distinct Chart Scenarios, But Just One NZD/CHF Trade

2 Distinct Chart Scenarios, But Just One NZD/CHF Trade

Kaye Lee, Head Forex Trading Instructor

Talking Points:

  • Weekly Breakout in Progress for NZD/CHF
  • A "Bounce" Trade Scenario on the Daily Chart
  • One Strategy to Capitalize on Both Scenarios

Although many currencies are either range-bound or offering only countertrend opportunities, NZDCHF is trading amid some potentially interesting conditions.

Regular readers are likely used to our traditional assumption that initial breakouts are likely to prove false, and as such, many may be surprised by this particular set-up. In this case, the weekly candlestick has breached the declining line of resistance, and while we would normally look for an opportunity to short on a lower time frame, such an opportunity has already passed.

What remains is the potential that this week may end with a strong close above resistance, thus continuing the upward price action. As a result, the trade is bullish and consistent with the direction of the breakout.

Guest Commentary: Weekly Breakout in Progress for NZD/CHF

The latest candlestick on the weekly chart of NZD/CHF has breached overhead resistance, causing speculation that a breakout is in progress for the pair.

However, just because the strategy differs somewhat from the norm, it does not mean that traders should stray from the philosophy of minimizing risk.

The daily chart below shows why multiple-time-frame analysis can be crucial. Where the weekly chart above does not show confirmation, the daily chart looks much more convincing. Of course, price can still break right back into the consolidation zone, but this should provide at least a reasonable bounce that traders on the hourly chart can take advantage of. If it develops into a trend continuation on the weekly chart, then there is potential for movement in the hundreds of pips.

Guest Commentary: Successful Breakout on NZD/CHF Daily Chart

The daily chart also shows why the language of “breakout” versus “bounce” trades can be somewhat misleading, since this trade is both a breakout on the weekly chart and a potential bounce on the daily chart.

The important point to note on the four-hour chart below is that the line of resistance-turned-support where price is currently interacting was drawn on the weekly chart. This means that there may well be some "give" to it, as even a small weekly fluctuation will result in prices breaking back below this line and then running off.

Guest Commentary: A Tenuous Support Level in NZD/CHF

A trend line support level on the 4-hour chart of NZD/CHF may not hold precisely, but can still be used to estimate the key support zone for initiating new long positions in the pair.

This is one of those situations that can potentially frustrate traders who try to trade the breakout, and then the false break back in, and then the second breakout. Of course, it could also just mean that prices are tumbling, but experience suggests it is better to have a “buffer,” and that’s why the support zone has been built off the below hourly chart instead.

Here, the support zone becomes more easily identifiable in relation to horizontal levels. The final support level emerges as 0.7484-0.7499, which represents a zone of risk less than 20 pips deep. That should provide excellent overall risk profile considering the weekly chart scenario that could produce a move containing hundreds of pips to the upside.

Guest Commentary: Key Zone for Initiating NZD/CHF Longs

The hourly chart of NZD/CHF can be used to more precisely identify the key support zone where new long positions may be initiated.

This trade is best taken on the 15-minute chart (not shown) once the key support zone is reached. Triggers on that time frame would include bullish reversal divergence, pin bars, and/or bullish engulfing patterns. As always, traders should be aware that two or three tries may be required to gain a successful entry should this move develop, and risk controls must be planned accordingly.

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