NZDCAD - Bearish Butterfly.
Updated
This week I have the Cad on my watchlist. This pair in particular is interesting as we have a 6 month bearish trend that has came to and end and began to consolidate. Within the consolidation we have a bearish Butterfly pattern. Price is overobught and also showing bearish divergence.
I am taking a bearish entry as the Daily chart i expect will close with a bearish inverted hanging man- a sign of a bearish reversal.
Within the next 24 hours we will have the release of the NZD Trade Balance. It is expected to increase on last month by 321 Million. Should this fall below consensus, we will see a rapid drop. Should the trade balance come out as expected (or higher) I will re-assess the position.
See previous Bullish butterfly on this pair as the consolidation began!
Butterfly ratios:
X:B = 78.6%
A:C = 38.2:88.6%
B:D = 1.618-2.24%
X:D = 127.2%
I am taking a bearish entry as the Daily chart i expect will close with a bearish inverted hanging man- a sign of a bearish reversal.
Within the next 24 hours we will have the release of the NZD Trade Balance. It is expected to increase on last month by 321 Million. Should this fall below consensus, we will see a rapid drop. Should the trade balance come out as expected (or higher) I will re-assess the position.
See previous Bullish butterfly on this pair as the consolidation began!
Butterfly ratios:
X:B = 78.6%
A:C = 38.2:88.6%
B:D = 1.618-2.24%
X:D = 127.2%
Note
The effects of the inverted hanging man at 0.9 can be seen below. This, along with the trade balance announcement, could be a great position for a bearish entry.Trade active
Note
The inverted hammer on the daily chart was the signal that the bullish trend is coming to an end. A break of this 4 hour trend line may be where we see price begin to decline.Trade active
First TP level has been reached. Position was closed and re-entered with half a position size.Trade closed: target reached
After first TP hit, the stop loss was moved to the initial entry point. Price reversed and crossed our adjusted stop. Trade is therefore cancelled out but we still leave with a 1.5% profit!
Related publications
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.