USD/JPY: Since this resistance is some kind of barrier for the pair, an opportunity to go “Short” might be created. NZD/USD:It is important to notice the pair is still uptrend oriented. The bullish envelope template, which is hypothetically supposed to indicate a close reversing trend, is not effective that time,
USD/JPY
Daily graph: http://www.real-forex.com/charts-daily/November2010/JPY_DAILY_231110.JPG
About three weeks ago, a serious increasing process started, however, for already 5 sessions, the pair is trying to cross a resistance at 83.60 without success. On larger view of the graph, we can see that zone used as a resistance about a month and a half ago.
Since this resistance is some kind of barrier for the pair, an opportunity to go “Short” might be created. In order to confirm that intuition, a decreasing configuration on 1H graph is required.
Potential trade
1H graph: http://www.real-forex.com/charts-daily/November2010/JPY_1H_231110.JPG
The required configuration should appear after the breakdown of the support 83.34 on a 1H scaled graph. This is the option chosen by our analysts to launch the transaction:
– “Limit” order on “Short” position 10 pips below the mentioned support, meaning: 83.24
– “Stop Loss” order on the last peak occurred which is: 83.56
– 1st level of “Take Profit” on the following support: 83.14
NZD/USD
Daily graph: http://www.real-forex.com/charts-daily/November2010/NZD_DAILY_231110.JPG
It is important to notice the pair is still uptrend oriented. The bullish envelope template, which is hypothetically supposed to indicate a close reversing trend, is not effective that time, since no one of the potential parameters required to confirm the template is applied: The template too distant from the next resistance and even more to the closest support, there was no technical correction preceding it.
Unless the feeling could be confirmed by a specific template or indicator, entering transaction against the current trend is not recommended at all. Presently, the pair is getting closer and closer to the support of 0.7645 but not close enough to confirm the template we just spoke about.
Once the pair will reach that support, three outcomes are possible:
1. Clear breakdown of the support will indicate the end to the current uptrend and will require a new technical analysis.
2. Stop on the level: It could be better waiting for a “Parking” of about a session and a half, and then launching a “Long” transaction.
3. Clear and sharp breach of the support: It could be safer waiting for a small correction and, after the identification of a decreasing configuration on 1H graph, go “Short” along with the new trend.
Have a profitable day!
Real-Forex team 