AUD/NZD Hits Critical 1.30 Resistance

Last updated 3/2/2010 3:01 PM EST (GMT -5) 3 Comments

FX360 Technical Analyst Staff

Technical Analyst, GFT

Last week, significant AUD/NZD resistance near 1.2980 was highlighted ( here ) based on an exceptionally symmetrical bearish butterfly pattern projected to complete near the major 2008 weekly top. Although the recent bullish surge up to the current 1.2995 high is a bit of a concern in terms of momentum (suggesting more stringent risk/trade management to the short side), this pattern has now come to fruition triggering our current short from1.2980. This type of price/time symmetry (127.2% of XA, 161.8% of BC, and 127.2% ABCD extension) adds to probability of at least a relatively brief reversal near this level making for solid medium-to-long-term short. The current target of 1.2650 sits just above 61.8% of CD and reflects a longer-term outlook since we're dealing with significant longer-term highs, but more conservative traders may look to take profits near the 23.6% correction of CD near 1.2860. For now, we'll look to tighten up stops at 1.2915 and reassess as this trade progresses. New highs above 1.30 don’t bode well and point to a potentially strong bullish continuation to 1.32 followed by 1.3550-1.36 (weekly extensions). The current stop of 1.3050 allows for a bit of whipsaw room as well as some room for prices to pull back closer to entry in order to cut out some of the risk.

Potential Strategy;   Short at current levels (1.2980) risking 1.3050 targeting 1.2650. Stops to break-even at 1.2915.

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Comments (3)

Qin

March 02, 2010 at 04:55 PM ET

Hey, Rogers
I am heavily siting on your side now....haha.....
This is the one of my most confidence trade this year...........

Good luck!

TheLoneTrader

March 03, 2010 at 05:35 AM ET

yeh well. you both lose.
and me.

stopped out at 1.3050

fishmanszmit

March 03, 2010 at 07:58 AM ET

Sure did. Stopped out!

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