More interesting price action today, only this time in the form of pin bars…and lots of them. But before we get to that, I’m still watching the same level on GBPUSD that I posted yesterday. I’m not covering it here as today was pretty uneventful for the pair. But I do think the 1.676 level on GBPUSD could be one of the best levels to watch going into next week.
Now for today’s price action…
EURNZD isn’t a pair I used to trade very often, but lately it’s been fun to watch and trade. The pair has been consistently giving us great pin bars at key levels. Today was no exception.
The one comment I will make regarding recent price action, is that the pair is starting to run out of real estate so to speak. This is a terminal wedge, meaning it has to eventually break one way or the other. See the next chart for a better perspective.
EURNZD terminal wedge. Keep in mind that this wedge has formed after coming off the lows from last year. Conventional technical analysis labels this as a bullish pattern with a greater likelihood of an eventual break to the upside.
Move to the weekly time frame to get a better perspective. Double bottom in 2012 and 2013 and now trying to put in a higher low. I do think we’ll get some follow through from today’s pin bar, but I’d trade it with a greater degree of caution based on this terminal wedge coming to an end.
NZDCHF is another pair I didn’t used to trade often, but just like EURNZD the pair has been putting in a ton of pin bars lately. We can see from the chart below that the pair has been trading within a well-defined channel, creating pin bars along the way.
So far the pin bars have given a fairly clear signal of when the pair is about to turn. If recent price action is any indication, today’s pin bar should signal to the market that the pair is ready to turn once again.
GBPJPY also put in a bullish pin bar today, however it’s small compared to yesterday’s price action. This doesn’t mean it won’t play out, but it does diminish the validity of the trade setup in my opinion.
Another concern here is that the pair recently broke trend line support in a big way back on May 14th. However considering that this pair loves to oscillate between levels, I wouldn’t be surprised to see a touch of the area circled in red below before resuming the downtrend. Just keep in mind the concerns noted above if you do decide to trade this level.
See the 4 hour chart below for a better view of the channel.
GBPJPY at 4 hour channel support
Last but not least, NZDUSD. I’m still pretty bearish on this pair as long as we’re below .8520, but I’m certainly not chasing the market. Instead I’ll wait patiently and let the market come to me. I’ve circled the area of interest below. These two levels converging provide us with an area of confluence should the market retest this level next week.
I’ll be keeping an eye on this level going into next week.