NZD/USD is not going down, it is going up, May 7th 2014

Dear traders,

today I have received a proposal for a complex trade (complex to me, of course) to short the NZD/USD. I am been bullish on this pair for some time and not without a good reason. In fact, Program Trading and professional traders have been supporting this price for some time and, so far, no measured move higher has failed on the daily and the weekly.

So, I really see no shorts in the Kiwi (NZD/USD) at the moment, like some people do. I am fine with that, and respect that, because there are as many opinions in the markets as traders. The sequence of measured moves higher on the NZD/USD daily is still intact and, as you will see from today’s May 7th NZD/USD update I posted before, the last measured move has reach target. Now if we get a retrace at this point it will be into the next measure move long on the daily. So  I would still look at longs.

There are so many levels the NZD/USD has to pierce before I would consider it a long term short, as it seems some analysis seem to conclude at this point, and in the larger timeframes, that it would make it difficult to me to trade a short at this point. But there is a more important aspect: I take the market one day and bar at a time, to see how Program Trading behaves.

I could never commit on a long term plan, say a 4 months, because I consider 4 months a very long period. I gauge what Program Trading is doing every day and I am not able to make assumptions. Or I should say I am not able to do assumptions any more: after 13 years I have realized that the markets are not a simple or complex system that you can fully predict. Forget than predicting in the medium and long term. Rather than making assumptions I like to have a system and money management technique that encompass the fact that the market can do anything, anytime. And I would want to still be safe, in any situation.

There is as much reaction in my method as forecasting, always based on what I see Program Trading doing.

I think for example to the recent area of support starting at 0.8546. This is really a clear and very good example (below picture):

"NZDUSD is not a short, is still a long", May 7th 2014

“NZDUSD is not a short, is still a long”, May 7th 2014

The 0.8546 level and the related area that extends below it onto to the 0.8509 level, is known to us since now 35 days. Still the 0.8508 level, the stop for this measure move long in the sequence, was never pierced to the downside indicating, in my opinion, that Program Trading and professional traders were not interested in selling this market.
As per the evidence of a move lower, NZD/USD has not given it just yet. In fact, the 0.8546 level that was used to test that evidence using the FibStalking timing technique. That level held twice in the last 30 days and participation in the related area of support was strong enough to bring price into 1st target at 0.8774.
The next level of support for this market, if the current correction lower continues, is going to come at 0.8590.
Have a great evening.
Giuseppe, the FibStalker

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