EURNZD Price Action Analysis – 20th July 2018
EURNZD has been in a range on the H4 chart for a long time. The price is at a strong level of Resistance. Moreover, it seems that the H4 chart has been trying to produce an H4 Bearish candle right from that Resistance level. If that happens and we get another H4 Bearish candle right after the Engulfing Candle, then selling the pair would get us some green pips. Let us have a look at the H4 EURNZD chart.
The level of 1.72985 is the level of Resistance here. See how the price reacted to it earlier. If the current H4 candle comes out as an H4 Bearish Candle and the next H4 candle as another Bearish candle, then the price would head towards the level of 1.70000 with a good pace. Let us have a look at the summary of the trade…
- Sell Stop Order: 172571
- Stop loss: 1.72985
- Take profit: 1.70000
- Validity: 72 hours
- Whenever possible, move the stop loss to the entry price and whenever you want, you can take profit anytime as long as you feel comfortable
In this chart setup, we have to wait for two H4 Bearish Candles. First one has to be an H4 Bearish Engulfing Candle and the second one has to be another Bearish candle (preferably a smaller one than the first one). We usually wait for a breakout to take our entry on an established trend. However, it is also possible to take entry at the beginning of a trend too. If things go accordingly, then a trend can be spotted early. There are three things to remember to be able to do that.
- Strong Support/Resistance to be spotted
- Engulfing Bullish/Bearish candle
- The second candle continues towards the trend (but a little smaller one than the first one)
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