NZDUSD – Finding a Long Entry At a Retest?

27 Nov - NZDUSD Daily Forex Chart

(Click on image for larger view)

Hi Traders,

Here’s the latest market update. In fact, I’m testing out this format, so please let me know if you prefer a commentary like this or if you prefer the short and simple commentaries that I’ve done in the past – see older posts.

The Big Picture

The above is the Kiwi that is testing a support level (~ 0.77) which was formed in June 2013. Since then, price has not tested it.

While we can see a strong drop since July 2014, we can also see that price has been consolidating around the support. On top of that, I can see a potential inverse Head & Shoulder pattern. Reversal traders would already been in the market if they took the Bullish Divergence signal.

The truth is, price is oversold as the fall has been over extended and a correction is expected. The question is, are we looking for a correction or a reversal?

The New Higher High

For those of you who have been following my trading courses, you would know that I’m a with-trend trader and I constantly look for market patterns to tell me the directions. I’m not here to predict and I manage my expectations carefully.

27 Nov - NZDUSD Daily Forex Chart v3

(Click on image for larger view)

Under normal circumstances, I already have a trade setup, as I usually use the first pullback as my entry signal. However, on this occasion, I would be looking for a new high in the new direction (long) before I have my signal to enter. That’s back to the basis that the current pullback is reversal entry and not a with-trend entry.

With that, I’ll be watching this closely.

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