Looking for opportunities with regards to un-hit monthly or weekly targets leads us to just about every NZD cross, but the NZD/USD, in particular, looks quite tempting. This market has been range bound for most of the year, but overall if we look at the big picture it is an overall down market. Recently the market has been at the price levels I look for and the targets support our thinking here. Let’s take a look at the un-hit target situation and try to come up with an entry plan that offers us a reasonable risk versus reward to make it worth our while.
The yearly target in yellow is really the only barricade for this trade to the upside, so I need price on the right side of this trend line and above the yearly target since that is our line in the sand. I would feel comfortable with a stop roughly 20 pips below support here, and if we use the yearly target and price action ABOVE that target as our entry signal, we get roughly 90 pips in risk. In order for that to be a wise risk, we need about 180 pips in reward. Let’s see if we can get that:
In this potential set-up, I am looking to enter long on this pair from .69185 and place my .68416 and exit around .70432. The key to this chart is the action we get on the USDX chart. It is pointing to the south fib wise — but there is a lot of volatility in the US market right now.