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Today we start with a long-term play that I have been trading short off and on for quite some time. The pair I’m referring to is NZDUSD.
For those who have been following this site for a while, you know that I like this pair much lower. In fact NZDUSD could lose an additional 1,300 pips over the next year.
Why?
Because the pair recently confirmed a double top pattern that formed between 2011 and 2014. Not only did we get a daily close below neckline support at .7369 to confirm the pattern, but we now have a weekly and monthly close below the level.
NZDUSD monthly chart:
From here we can watch for a break below the next support level which comes in at .7180. I expect the bearish momentum to continue, which gives us a great opportunity to pyramid into a short position for a long-term play.
Summary: Wait for a 4 hour or daily close below .7180 and then watch for a retest as new resistance. Key support comes in at .7050.
GBPJPY analysis
EURJPY analysis
