Long NZD/CAD - potential H&S (medium to long term)Weekly
8 period moving average has crossed above the 16 period moving average. Referring to a monthly chart this could be the dip in order for the long term up trend for this pair to continue.
Daily
Looking at the daily chart, a head and shoulders pattern has formed. The resulting neckline can be drawn in two ways:
1. Horizontal at 0.91 - in line with the left shoulder and a level at which the current price has been flirting with.
2. Slanted - in this case the neckline has been broken and price action over the last couple days can be viewed as pull back to the falling neckline.
In both cases the right shoulder formed a low of 0.886. which is now a key level for this play.
The second notable feature of the daily chart is the ADX crossing above 20 suggesting a trend is starting out.
4 Hour and 1 Hour
Key support lies around 0.9012. On the hourly my current entry lies 0.9013 to 0.9040. Over the last couple days price has rallied after entering this range and is therefore a key region of support. Note this also lies just above where the slanted neckline would be.
Trade Parameters
Entry: 0.9013 - 0.9040
Stop loss: 0.8850
Targets: 0.9240 (R/R: 1.29), 0.9410 (R/R: 2.29) and 0.9530 (R/R: 3.00)
