A nice swing trading opportunity has landed on the NZDUSD market via the daily chart. When trading within a trending market, we’re looking to trade ‘in position’, and to do that we use counter trend retracements that allow us to ‘buy low & sell high’.
In the case of the downtrend here, a counter trend retracement has given as a good chance to sell after a new swing high formed.
A bearish body inside candle formed as the market stalled and churned at an important swing level – communicating to us swing traders the counter trend move may terminate, and the dominant downward move may continue.
The trigger for us here is to wait for a break of the inside bar to get in with the bearish momentum.
We can see price is now breaking the low triggering short positions. If the breakout holds, a logical target could be the market structure level marked on the chart.