NZDCAD Breakout Trading Strategy – 24th Jan 2019
NZDCAD has been bullish for two consecutive days. The H4 chart clearly suggests that the price has come close to a strong resistance level and it might start having some correction. In fact, the potential support level is not far from the resistance level. Thus, we might as well expect a consolidation here. After having a consolidation, if the price makes a breakout at the higher high of the H4 wave, then the price would head towards the North again. Let us have a look at the H4 NZDCAD chart.
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The level of 0.90735 seems to be the level of resistance here. The price had a rejection around this level earlier as well. On the other hand, the level of 0.90430 is the level of potential support here. If this level is held and produces an H4 bullish engulfing candle as well as an H1 breakout at the level of 0.90430, then buying the pair would get us some green pips. Let us have a look at the summary of the trade…
- Buy Stop order: 0.90735
- Stop Loss: 0.90430
- Take Profit: 0.91440
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I am expecting a consolidation here instead of a correction. There is a little difference between correction and consolidation. A wave of correction goes up to 60% of the trend’s wave whereas a consolidation usually goes up to around 25% of the trends wave. Consolidation usually takes place where bigger time frames’ trend is similar to the trend of the chart that we are eying on.
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