Alpari - Analytics

Alpari

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NZDCHF: long-term buy signal

Last week, we did an analysis of the AUDCHF pair. Now it’s time for its little brother: NZDCHF. The setup we have here is great for long-term investors as it is present on both the H4 and D1 charts. Our outlook on this instrument is positive.

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Between August and the middle of October, the pair formed an inverse Head & Shoulders pattern. On the 15th of October, we got a breakout of the neckline (black), which gave us a buy signal. The NZDCHF pair listened and went higher. The beginning of last week brought us a bearish correction (red lines), which aimed at the neckline to test it as a closest support. The test was positive for buyers and the pair went higher. The correction formed a wedge and the new week has brought us a breakout of the upper line of this pattern, which is a legitimate signal to go long. That is the beauty of price action!

Positive sentiment here remains as long as we are above the yellow horizontal support. That gives us a lot of space for a bearish correction, but in my opinion, after today's breakout, the price should mostly aim higher.


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