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NZDUSD: Stay Short Ahead of Bounce

NZDUSD: Stay Short Ahead of Bounce

2011-03-11 10:45:00
Ilya Spivak, Sr. Currency Strategist
Share:

Strategy: Short at 0.7516, Targeting 0.7362

Floating Profit/Loss: +172 pips

We sold NZDUSD at 0.7516. Prices have narrowly closed below our initial soft target at 0.7362 but an Inverted Hammer candlestick and early signs of positive RSI divergence warn an upswing may be ahead. The outlines of a bullish Rising Wedge formation are also taking shape, calling for a cautious approach from here. An upswing will be seen as corrective as long as prices remain below falling channel resistance, now at 0.7470. We will nudge our soft target slightly lower to 0.7344, looking for a close below that as indicative of a larger down move is ahead. Our stop-loss will also be trailed lower to the break-even level (0.7516).

NZDUSD_Stay_Short_Ahead_of_Bounce_body_03102011_NZD.png, NZDUSD: Stay Short Ahead of Bounce

To discuss these strategies with other traders, please visit the Candlestick Forum

To receive future articles by email, please contact Ilya at ispivak@dailyfx.com

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