The NZD/USD is setting up for a good short opportunity

Forexmentor.com Forex Trading Price Action

Let’s revisit the New Zealand Kiwi. The weekly and daily charts are clearly showing a downtrending market – MACD having turned negative in both cases. The EMAs (50x100x200) are also signaling price weakness – back-to-back death crosses on the 4 and 1 hour charts.

Today, price rose well into the sell area above the central pivot point, following positive divergence MACD-to-price late yesterday evening. In essence, price is going the wrong way, and setting up for a good short opportunity.

This is the advantage of looking at the charts top-down. First, you figure out the overall trend on the higher-level charts, and then you look for counter-trend movements on the lower-level charts. There’s nothing wrong with trading the counter-trend moves, but you must be ever vigilant to catch the reversal in sync with the overall trend.

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