NZDCHF Technical Analysis
The New Zealand Dollar (NZD) gave multiple entries at the daily close, which we chose to dismiss due to the market’s sensitivity to Greece. After observing the price action in today’s session, we can no longer enter NZDUSD as we have missed the entry while shorting GBPNZD will demand a protective stop loss order that exceeds 300 pips. We have no technical entry in EURNZD unless we turn to the 4hr chart (negative divergence), which we are dismissing as we do not wish to be exposed to the Euro. We are therefore opting for NZDCHF that allows us to employ a relatively tight stop with a decent Risk Ratio (RR).
NZDCHF Daily Chart
Please click on the chart to enlarge:
The Piercing reversal pattern provides us with an indication that is due for a trend reversal. It is not the cleanest entry but we are expecting NZD to strengthen against a basket of currencies. What may contribute to our bullish projection for NZDCHF is a verbal intervention by the Swiss National Bank (SNB) in regards to the strong Swiss Franc (CHF).
NZDCHF Trade Details
NZDCHF long at market price (0.6697)
Take profit: 0.7135
Protective stop: 0.6580
Risk Ratio (RR): 1 : 4 (approx.)
Estimated duration: 14 days
10/06/15 UPDATE: Despite NZDCHF recent recovery the protective stop loss order was triggered, incurring a loss over the long trade.
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