My week 46 Sunday analysis above clearly shows that as of 8pm GMT on Sunday 12th November 2017:
- NZD is the weakest (W3) currency in the market
- CHF is the 2nd weakest (W2) currency in the market
Wow there… “You can’t trade W1 against W2 !” …”Can you ?”
This is where I go a little “Off Piste” as it were. Whilst there a 9 immediate currency cross pairs to look at generated by each of my analytical outputs (Click here to see how these are compiled) there are many secondary combinations to look at too should you choose to.
I selected this pair to look as I was already short the NZD in several other trades, and being the kind of trader who wants to extract as many pips of profit as I can from each Strength / Weakness opportunity, and given that NZD was showing as W1 right across the board, I decided to go looking through all the NZD crosses, just for fun…
Let’s pull up the NZD/CHF chart and see what it has to offer.
NZD/CHF Short – Trade rational and chart
Another midweek signal generated by my Daily FX Strength / Weakness Analysis on Tuesday 14th November 2017.
Here we see an obvious falling trend line anchored back in the 28th of July. From there we have a formation point dated 29th September. We then see another 2 “tests” of the trend line followed by a big selloff.
Now, whilst I would not necessarily recommend shorting one weak currency against another weak currency I simply couldn’t resist this one as it offered some predetermined downside potential to the 0.6720 resistance line.
Trade Outcome: NZD/CHF Short
The market opened @ 0.6892 and closed 156 pips lower @ 0.6736
I entered short on Tuesday morning, exiting just minutes before Friday’s 10pm GMT market close.
I don’t personally like trading the CHF (being an ex-Alpari UK client…) so in and out, take the money at 0.6720 just before the close and run.
Outcome: A cheeky + 137 pips profit !