FOREX Chart Of The Day: The Strongest Vs Weakest In The Forex Market
Are you a trend trader?
Hi, and welcome to this Blueberry Markets video update with me, John Kibbler, head currency analyst.
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In this video, we’re going to look at one of the strongest currencies against one of the weakest currencies, and that is NZD/CAD. As we already know, we’re in a USD/CAD long position just through here. We’re looking to continue to sell the Canadian Dollar.
If I bring in the strength from the weakness table that we looked at in the Forex Market Outlook. We can see that the New Zealand Dollar is one of the strongest currencies, gained four places at plus seven. The Canadian Dollar is one of the weakest currencies, and that showed us that there was some trend continuation potentially be had on this market this week.
We also reviewed this pair last week, and one of our Blueberry Jam markets that we looked at was NZD/CAD long. It didn’t trigger because now we’re only just seeing that market break to the upside.
Let’s go break that market down and have a little bit of a look at this. This is what I like to do about trading. I like to look at the strongest against the weakest currency. The reason I do that is that that means there’s likely to be a trend on that market.
If I go back into this, we can see here on the daily time frame that the market has recently changed trend. What I mean by that is the market is no longer making lower lows like it was, and lower highs through here. It is now making higher highs and higher lows.
It’s gone from being in a downtrend to potentially being in an uptrend in the market. We can see here this is where we were looking for entries to buy just through here. I think we had an order just above this high, which didn’t trigger, so we canceled the order. But now the market’s breaking to the upside.
I like this potential to go higher because of the strength of weakness. Also, pull out into the weekly chart. A nice sort of level just sitting up here, which I think the market is going to go and head towards. I’m expecting a rally up into this area through here because the market failed three times to break through it.
We had a false break out here, false break out here, and here so I’m looking for that market to go and retest that untested area. The market at the minute is pushing to the upside.
What I like to do when I start seeing these bullish daily candlesticks is go into the four-hour time frame, because I want the four-hour trend to match up with that daily trend. You can see here we had a little bit of consolidation at that level of support, and now the market is breaking to the upside.
What I like to do then is add an area of support and resistance. If I grab this rectangle and do this. What I’ve done here is I’ve notified myself that the market has a high point in here, opens and closes just through there, which includes these two areas as well.
What I’m expecting is, if the market closes above this area in the next few hours then I’m going to be looking for the market to pull back. Retest that structure and then continue to move to the upside in line with the trend. Because when we typically see a daily move to the upside, we see a four-hour trend within that. That’s what I’m looking to capitalize on here.
I’m looking for the market to retest this area of structure. and then it’s all about how do you enter that market. Do you have a strategy that you can enter in this zone? That’s what we’re going to be looking for.
For me in particular, you know I like to trade it with the 15-200 moving average. I like to try it with a change in trend. If the market starts pushing back and continues to the upside and then drops back in, what I’m going to be looking for is double bottom patterns, head inverse, head and shoulders patterns.
Anything like that, that will suggest that the market is going to start pushing to the upside, while the RSI is in an oversold condition. To see that, I’ll be looking for that long position in this market. Keep an eye on NZD/CAD strongest against the weakest currency this week. If we do see that play-out we should expect the market to rally up into these weekly highs.
Thanks for watching this video update, and I’ll see you soon.
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