Tuesday, 29 October 2013

Momentum Sell Signal Alert for NZD/USD

Steven Randolf, Excel Analyst

NZD/USD had risen nearly 800 pips from its September low of 0.7737 to its October 22nd high of 0.8542, whereupon it started a correction that looks serious enough to take it lower still.

The no-taper of September and debt deal optimism of October steadily pushed this pair upwards, but October 22nd proved to be a reversal point as the Kiwi trimmed 270 pips from its high over the last five days.

This 5-day descent of the Kiwi has triggered my daily system to issue a momentum sell signal alert at 5:00 PM EST on October 28th, price of 0.8278. This signal is given further support from price breaking down through trendline resistance at 0.8300 and 23.6% fib retracement level of 0.83500.

The next level of support for this pair is 0.8194, the low of October 2nd, but if this level is broken, momentum could very well push this pair down to 50% fib retracement level of 0.8100 (178 pips) over the next 10 days.

This short trade could prove tricky fundamentally because the US Dollar remains under selling pressure with continued expectations that the central bank will delay taper until well into next year (stimulus delay = weaker dollar). Safety exit should be initiated if price crosses above 0.8400.

Click to Enlarge NZDUSD Daily Forex Chart

Forex Razor - MT4 EA Stats

Strategy

Signal  Momentum Sell Signal Alert on NZD/USD, Entry Price: 0.8278.
(Generated at close of daily bar, Oct 28, 5:00 PM EST)
Strategy Logic Strategy uses Momentum, Moving Average and Price Channel to develop trade signals:
  1. Momentum strategy buys (sells) when the 21-Period Momentum is greater than (lower than) than 0. 
  2. Moving Average strategy buys (sells) when close crosses over (under) the 115-SMA. 
  3. Price Channel strategy buys (sells) when close is greater than (lower than) the highest bar (lowest bar) of the last 10 bars. 
Strategy Report: Here.
Stop Loss When daily close crosses above 0.8400
Take Profit 0.8100 (170 pips)
Download MomoNZDUSD-D1_Oct28

All trade ideas and strategy setup suggestions found on ForexRazor.com are hypothetical. ForexRazor.com has not placed these ideas in a live trading environment. Forex Trading involves high risks, with the potential for substantial losses that exceed your initial deposit and is not suitable for all persons. Past performance is not necessarily indicative of future results.
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