For the analysis of AUD/NZD I first identified the overall long term trend on the 4 hour chart. In this case the currency pair is moving strongly in a uptrend therefore I was looking for any opportunities to enter the market in a LONG position.
I then used the 1 hour chart in order to find a trade set-up, therefore I searched for a recent PREVIOUS move to the upside in the market and identified the SWING LOW and SWING HIGH of this session and used the FIB RETRACEMENT TOOL from the SWING LOW and dragged it to the SWING HIGH, now I had my Fibonacci levels laid out.
The SWING LOW also represents an area of SUPPORT and the SWING HIGH also represents an area of RESISTANCE, from the SUPPORT area we can see that price was making moves to the upside and as price reached the area of RESISTANCE we saw price retrace back DOWN and hit the key FIBONACCI LEVEL of 61.8% and carry on the UPTREND.
In the area of interest on the chart I also identified a CHANNEL where the 2 GREEN lines are also acting as SUPPORT and RESISTANCE, we can see price bouncing off each of the lines with the top line acting as RESISTANCE and the bottom line acting as SUPPORT. Within the area of the channel, we can see that price very nearly hit the RESISTANCE area before forming a BEARISH candle indicating a RETRACEMENT back towards the downside and hopefully hit the 61.8% FIB level which will indicate us to place a trade in this market. The bottom line of the CHANNEL is in line with the 61.8% FIB level therefore IF price reaches the bottom of the channel it is an extra indication to place a trade.
If I place this trade I will place it with a 2:1 RISK-REWARD RATIO.
Please let me know what you guys think of this trade set-up, feel free to message me any questions you may have, I am more than happy to help :)
I then used the 1 hour chart in order to find a trade set-up, therefore I searched for a recent PREVIOUS move to the upside in the market and identified the SWING LOW and SWING HIGH of this session and used the FIB RETRACEMENT TOOL from the SWING LOW and dragged it to the SWING HIGH, now I had my Fibonacci levels laid out.
The SWING LOW also represents an area of SUPPORT and the SWING HIGH also represents an area of RESISTANCE, from the SUPPORT area we can see that price was making moves to the upside and as price reached the area of RESISTANCE we saw price retrace back DOWN and hit the key FIBONACCI LEVEL of 61.8% and carry on the UPTREND.
In the area of interest on the chart I also identified a CHANNEL where the 2 GREEN lines are also acting as SUPPORT and RESISTANCE, we can see price bouncing off each of the lines with the top line acting as RESISTANCE and the bottom line acting as SUPPORT. Within the area of the channel, we can see that price very nearly hit the RESISTANCE area before forming a BEARISH candle indicating a RETRACEMENT back towards the downside and hopefully hit the 61.8% FIB level which will indicate us to place a trade in this market. The bottom line of the CHANNEL is in line with the 61.8% FIB level therefore IF price reaches the bottom of the channel it is an extra indication to place a trade.
If I place this trade I will place it with a 2:1 RISK-REWARD RATIO.
Please let me know what you guys think of this trade set-up, feel free to message me any questions you may have, I am more than happy to help :)