How to trade the Breakout at NZD/CAD? / Swing Trade
Good morning traders!
🔸Today we find an evident breakout in the Resistance zone in the NZD / CAD pair. The current price is the highest level that has been reached this year.
🔸The scenario that this pair is presenting may offer an excellent opportunity for a medium-term bullish trade.
🔸After the current Resistance level (0.90500), the price has a clear path to the next Resistance zone (0.92500), which gives a clean move of approximately 200 pips.
How could we take a position in this situation?
🔸Of course, many traders will be taking positions in the current movement, but we believe that having a little patience can give us a better trade.
🔸This is mainly due to the first move being a potential fakeout and canceling the direction.
🔸On the other hand, if we expect a clear break, and then a consolidation (corrective movement), we can have a confirmation of the price and also a higher Risk / Reward ratio.
🔸The ideal situation is a corrective structure with a clear pattern (triangle, zigzag, flag, pennant) and a pullback to the Support Zone. Once that structure is formed, we will trade the
breakout, with the stop loss behind the structure, and the take profit in the next resistance zone.
🔸Today we find an evident breakout in the Resistance zone in the NZD / CAD pair. The current price is the highest level that has been reached this year.
🔸The scenario that this pair is presenting may offer an excellent opportunity for a medium-term bullish trade.
🔸After the current Resistance level (0.90500), the price has a clear path to the next Resistance zone (0.92500), which gives a clean move of approximately 200 pips.
How could we take a position in this situation?
🔸Of course, many traders will be taking positions in the current movement, but we believe that having a little patience can give us a better trade.
🔸This is mainly due to the first move being a potential fakeout and canceling the direction.
🔸On the other hand, if we expect a clear break, and then a consolidation (corrective movement), we can have a confirmation of the price and also a higher Risk / Reward ratio.
🔸The ideal situation is a corrective structure with a clear pattern (triangle, zigzag, flag, pennant) and a pullback to the Support Zone. Once that structure is formed, we will trade the
breakout, with the stop loss behind the structure, and the take profit in the next resistance zone.
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