NZD/USD In A Perfect Downtrend – Let’s Pick A Place To Sell
Much like its neighbour the AUD/USD pair, the NZD/USD has been in a downtrend for the last two months. Over the last 3-4 weeks the downtrend has followed a perfect pattern.
As you can see on the H4 forex chart below, the two trend lines of the channel are parallel and the moving averages are helping as well.
The upper trend line and the 50 SMA have become one
First the 100 smooth MA (red) was providing resistance. After, the 100 simple MA (green) broke and the 50 SMA (yellow) turned into resistance.
In the last two weeks the 50 SMA has turned into a perfect trend line. It´s been hiding behind the real trend line on the top channel over the last two weeks, this is why you can´t see it on the chart.
So the downtrend is clear and right now we´re near the end of the last selling wave. Stochastic is oversold, so we may see a retrace take place soon.
I´m trying to pick a selling spot before the retrace even begins. Perhaps the price will touch the bottom trend line before retracing up or perhaps it will start to pull back right now. Wherever the retrace happens, the selling spot is the same – the 50 SMA.
The top trend line is also at 50 SMA so the resistance is twice as strong. I don´t know at what price the 50 SMA and the trend line will be when the price meets them because it will depend on how much time it takes to complete the retrace.
By the way, does anybody know a programme (EA) which opens trades when the price reaches a certain moving average? Because, I might be asleep when the price gets there, so it would come in handy.
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