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Daily Observations: A Non-FOMC Trade: AUD/NZD Triangle Seeks Resolution
DailyFX.com -
Looking for a pair that will be buffed from the Fed? One such possibility we've been exploring in recent days has been waiting for resolution in the AUDNZD triangle.
AUDNZD Daily Chart: August 2014 to Present
Typically, the preference is to trade a consolidation in the direction of the broader trend. For AUDNZD for several years, the trend has been lower. However, in recent weeks, an attempt at establishing a longer-term bottom may be in effect.
Accordingly, there are opportunities on both sides of the recent triangular consolidation in AUDNZD (with risk levels outlined below):
Trade Idea #1: Long AUDNZD
Entry: 1.1305 or above
Stop: 1.0895 or below
Risk: -410-pips (or more depending upon exact entry/stop)
Target #1: 1.1755 (pennant/flag 61.8% extension from April low) (+450-pips from 1.1305 entry)
Target #2: 1.2285 (100% extension) (+980-pips)
Trade Idea #2: Short AUDNZD
Entry: 1.0895 or below
Stop: 1.1305 or above
Risk: -410-pips (or more depending upon exact entry/stop)
Target #1: 1.0485 (+410-pips from 1.0895 entry)
Target #2: 1.0200 (+695-pips)
Target #3: 1.0019 (yearly low) (+876-pips)
For a more detailed explanation, please click the "read more" link below and scroll to the bottom half of the article.
Read more: One Last Data Hurdle to Clear for USD Pre-FOMC
--- Written by Christopher Vecchio, Currency Strategist
To contact Christopher Vecchio, e-mail cvecchio@dailyfx.com
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