Following The Trend In NZD/USD
Skerdian Meta • 1 min read
NZD/USD has climbed a small hill in the last 2 weeks, but in the last few days, it has been one directional. The uptrend has accelerated and the pullbacks have been minimal.
Actually, if we look at the hourly forex chart, we see that the stochastic indicator has remained overbought the whole time, with the biggest dip being a mere 15 pips. This latest dip accounts for about 40 pips, which makes it a full retracement on this timeframe chart.
The stochastic is now oversold, while RSI has started to turn up. Both of these were buy signals for us, so we decided to take the step and open a forex trade at 0.7028.
Another reason for this forex signal was the 20 SMA (gray): it has been providing mild support/resistance, so we added this technical indicator to our cart.
The uptrend is resuming
We´ve moved below that moving average, which has turned into resistance now but as I mentioned it´s only a mild indicator.
The important thing is that we´re in the same direction as the short term trend. It´s true that sometimes these strong trends offer some violent pullbacks, but this doesn´t feel like one of those times and the decline seems to have stopped. After all, we have to pull some trades if we want to trade forex and this looks like a pretty good setup.