Why should you short NZDCHF?
In this video, we look at the strength and weakness table and highlight why we are looking to short the New Zealand Dollar.
Watch the video to learn more…
Hi, and welcome to this Blueberry Markets video update with me, John Kibbler, Head Currency Analyst.
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In this video, I’m going to quickly go over NZD/CHF, why we are in the trade and what we could look for if you’re not in the trade.
Essentially, the strength and weakness table showed us that the NZ Dollar is in that reversal situation. When I look at this, I like to see the currencies are, obviously, strong.
If we look at GBP/NZD, it might be pushing to the upside. The GB Pound’s having a little bit of a dip today. But yesterday, the GBP/NZD may have a little bit of a push to the upside. When I see this, I want to be looking for daily closes suggesting that the market could be finding some weakness.
Last night, I looked at the charts. I was looking at Kiwi pairs, in particular, and noticed that NZD/CHF came and retested this structure high, through here, and retested and rejected it. It didn’t want to make a new higher high, so it rallied through that previous high there and then it closed back down forming a bearish engulfing candle.
When the price does things like that, it does suggest that maybe the buyers aren’t quite in control. Here, we can see very low ranging daily candlestick. Nothing great. If you wanted to look for buying pressure, you’d like to see these momentum candlesticks. We don’t have that here. I thought it would be a good idea to short this market place with our stop orders above the highs, then target these previous structure lows, here.
Suppose you’re not in this trade. How can you get in this trade? Now, when the daily candlesticks are forming bearishness or bearish closes like this. I like to look at the four-hour trend and say to myself: “Where are the four-hour support and resistance levels that the market is likely to test for short positions?
Now, more averages are looking for more bullish opportunities at the moment, but if I delete those, we can look for the clear areas of support and resistance. If we look left, there’s an area, here, that the market has recently found resistance and support on. We want to look for potential for the market to come and retest this area so we can look for short positions here because that would be in line with the trend.
You want the four-hour to start making lower highs and lower low. And if the market does pull back into this zone, that’s when we can dive into the likes of the hourly or the 15-minute and see if we do get any changes on our solid core, here, where we can start looking for further shorting opportunities.
But at the moment, the daily closes are bearish in line with our bias with the NZ Dollar rolling over or being overbought and then looking for targets back at these swing lows.
If the market breaks through those swing lows, then we can look for further short opportunities. But at the moment, that is the next area of support we can look to target.
So, keep an eye on this. I like NZD/CHF to the downside, based on the strength and weakness table. And thanks for watching. If you have any comments or questions or any charts that you want me to see covered this week, please leave me a comment below and I’ll answer it. Thank you.
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