NZD 2018 and beyond

2017년 12월 2일

NZDUSD 2018 and beyond forecast

Here is another very extremely speculative long term analysis on NZDUSD. The pair has previously given us a bullish symmetrical triangle which broke out in the opposite direction from the direction it normally would according to text book theory. Price then went on to form another symmetrical triangle, however this one is bearish. Still, because symmetrical triangles are notoriously known to have a life of their own and often surprise traders, in this analysis I am only speculating the extent of the breakout in either direction when it happens. For those who don't know why symmetrical triangles are tricky, they denote massive uncertainty in the market between buyers and sellers. The reason why we have (for lack of a better term) top and bottom trend lines converging to form the triangle is because both buyers and sellers are willing to let the price go lower and higher respectively before they sell or buy. Basically, I think this means they are both in comfortable positions however sooner or later either side will give in and that will give us the breakout.

From the above, I have simply denoted minimum price objectives for both scenarios. If we breakout upwards the minimum price objective or target will be around 0.87945 and if we breakout to the downside the minimum price objective will be around 0.52520. Both targets are at key levels. Now, as we can see from the chart, I have plotted two trend lines suggesting an upward trend but price has only touched these trend lines twice on both sides which means they are not valid yet, we need a third touch on both.

In the event that price breaks out upwards, we can see that there is a key resistance price range where price will most likely end up because support and resistance act like price magnets, price is pulled towards them. If that happens price will still not have found that third hit on the upper trend line to validate it so we still wont be sure about that projection. In the event that price moves downwards, before it fulfills the minimum price objective we will have seen a third hit on the lower trend line and a breakout which will validate it but price will also break the trend line and possibly hit the all time low for the pair at 0.38905.

In my view, Fundamentals, Sentiment and the general scope of world events gives more probability to the upward move however, technically speaking the bearish symmetrical triangle in play right now suggests a break downwards.

So what does this chart tell us, nothing much and a lot at the same time. Long term if we just wait and see which way price breaks out, money will be made. I will wait and see and then ride the ebbs and flows...surfing and fishing at the same time! I will repeat, as i do with all my analysis, the market will do what it wants, this is just an idea, an amateurish one at that, not a holy grail.

Feel free to critic, refute, agree!

Mentors not Trolls please!