NZD/CAD Approaching Short Opportunity at 0.7942

Last updated 11/16/2009 7:32 PM EST (GMT -5) 0 Comments - Add your comment

Forex Trading involves high risks, with the potential for substantial losses and is not suitable for all persons. Past performance is not necessarily indicative of future results.

Bradley W. Gareiss

Technical Analyst, GFT

The NZD/CAD has been trending down for over 5 years. However, the pair has recently risen. This provides us with an opportunity to watch for long term bearish patterns. We have seen resistance at 78.6% of YZ on the Weekly Chart. There is a bearish Gartley forming that could work within the context of the downtrend and possible longer term resistance.

We are looking to sell the NZD/CAD at 0.7942 (Point D). Point D is located at the convergence of the following points:

This is a fairly straightforward trade so we will jump into possible red flags that could invalidate this trade. First, we need to watch how quickly CD completes. We are looking for the CD leg slow down and enter the trade near our hypothetical entry on the 4hr Chart. If there are long bars near the completion of the CD leg, we will not take the trade. If the pair comes within 10 pips of reaching our entry, does not enter, and reaches T1 before entering, the trade is invalid. The trade is also invalid if the pair falls below 0.7760 before hitting our entry.

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  • Weekly Chart - Bearish resistance at 0.7980 provides a possible bearish context.
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  • 4hr Chart - Bearish Gartley; sell at 0.7942.

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