This article is Part 2 of a series.
Revisiting NZD/CHF this week after the pair breaks consolidation to the upside with strong momentum. Is this a new leg higher in the recent uptrend?
NZD/CHF Long Setup
A couple of weeks ago, I threw NZD/CHF onto the watchlist as New Zealand economic data had improved and the RBNZ held back from being overly dovish in their rhetoric.
And with New Zealand largely overcoming the coronavirus pandemic enough to start opening up their economy, I’m staying bullish on NZD against the majors.
I’m choosing to play this bias against the Swiss franc as global risk sentiment continues to lean positive on recovery hopes and vaccine news, and on the ongoing currency intervention story by the Swiss National Bank.
In terms of price action, it looks like it’s favoring the bulls as the pair has broken above the falling ‘highs’ pattern that I highlighted in my watchlist post two weeks ago. I’m taking that as a signal of a new leg higher in the current environment, which I will be scaling into from around current levels down to the falling trend line.
My target will be the major area of interest that served as support during the Summer of 2019, and my stop will be one daily ATR from my lower entry order / below last week’s consolidation area. Here’s what I’m doing:
Long half position NZD/CHF at 0.6000, max stop loss at 0.5860, max target at 0.6200
Long half position NZD/CHF at 0.5930, max stop loss at 0.5860, max target at 0.6200
I’ll be risking only 1.00% of my account on this position with a 2.71:1 potential R:R if both positions are triggered.
As usual, I’ll look to maximize the trade by adding to my position/roll stop up to max out the trade if traders continue to favor the Kiwi over the franc.
Of course, I’ll look to close out quickly if conditions or data changes back in favor of the Swiss franc.
As always, remember to never risk more than 1% of a trading account on any single trade. Adjust position sizes accordingly. Create your own ideas and don’t simply follow what I do.
This content is strictly for informational purposes only and does not constitute as investment advice. Trading any financial market involves risk. Please read our Risk Disclosure to make sure you understand the risks involved.
Read more about this trade idea's development over time.
NZD/CHF hits my watchlist for a potential pop in volatility from the upcoming Reserve Bank of New Zealand’s latest monetary policy statement.
Revisiting NZD/CHF this week after the pair breaks consolidation to the upside with strong momentum. Is this a new leg higher in the recent uptrend?
After a strong pop higher, I’m making a quick adjustment to my NZD/CHF long position to reduce risk and increase my max profit potential.
After adjusting my NZD/CHF long trade last week, the pair shot higher to nearly reach my new max target at 0.6300. With a solid gain and weekend risk ahead, I decided to close for a nice short term gain. Here’s a quick review!