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NZD/USD Forming a Channel (December 5, 2013)
NZD/USD has been trending lower in the near term, as seen on the 1-hour and 4-hour time frames. To be specific, a falling channel is starting to form on the 4-hour chart, as the pair is getting ready to test the trend resistance.
Stochastic is moving higher, which means that Kiwi bulls might push the pair up to the top of the channel around the .8300 major psychological resistance. From there, if the oscillator crosses down, bears might move in and push the pair back down to the previous lows around .8100 or new lows possibly at .8050.
Shorting at .8300 with a tight 50-pip stop and a target at .8050 would be a 5:1 trade but it might be helpful to move the stop to entry once price tests the middle of the channel around .8200.
By Kate Curtis from Trader's Way
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