Definitely, the past week has been marked by a political battle around Brexit and shutdown of the US Government. I like the risk, but reason advised not to play with an unlocked grenade, so I put aside the pairs with these currencies and focused on crosses. From the technical point of view, the most interesting thing could have happened at EURNZD, because the characteristic shape of the Head and Shoulders formation gave hope for interesting trades.
But let’s go back first to the unresolved last week puzzle which was contained in the analysis of 7 January this year. – “DAX30 – Price Action vs. Over Balance – who will be the winner ?”
DAX30 – 07-18.01.2019
The graph comparing the state of 7.01 and the current one of 18.01 speaks for itself. It took DAX 10 sessions, but in the end, we got an answer to the question OverBalance vs Price Action+MACD. Today we can give a verdict – this time the victory is on the side of Price Action, and the course of quotations (red arrows) was very much in line with the assumptions of this strategy.
In the case of this pair I wrote in the analysis from 14 January – “EURNZD – RGR on H4”: “On the H4 chart the H&S formation was formed, the neck line at the level of 1.6846 has already been defeated. In addition, the trend line running through the December lows (5 and 12) was also defeated, which may indicate further declines. The goal for supply may be the nearest demand zone starting at the level of 1.6556. For sell orders, Stop Loss should be located above the neckline and above the last minimum of 1.6885”.
The analysis has already proved itself, quotations have fallen by 120 pips, but now the price has returned to the defeated neckline and so far, judging by the bullish pinbar on H4, it is not expected to fall in the near future. I managed to collect some pips, but everything is closed and I will watch from the side further development of the situation on this pair.