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Will NZD/USD Terminate Downtrend Upon This Double Bottom?

March 15, 2015 (Last updated on March 27, 2015) by

NZD/USD is trending downwards since July of 2014. The currency pair was moving in strong waves until it had met its support near 0.7170 level on February 3 this year. Then, it has failed to set up a new lower low in its attempted fall on March 11. The resulting chart pattern is an almost classic version of double bottom, which is a strong bullish signal. The only significant disadvantage of this DB occurrence is that the first bottom is somewhat longer in time than the second one appears to be as of now.

The formation is outlined on the screenshot below. The bottom yellow line marks the two troughs — the main indicator of a double bottom pattern. The upper yellow line depicts a kind of a neckline, which marks the inter-bottom peak and can serve as breakout indicator for traders. The cyan line is my entry trigger, which is located at 10% of the pattern’s height above the neckline. The green line is located at 100% of the same and will serve me as a take-profit level. I will use the breakout candle’s low for my stop-loss. Please click to see the full-size chart screenshot:

NZD/USD - Double Bottom Pattern on Daily Chart as of 2015-03-15

The chart was built using the ChannelPattern script. You can download my MetaTrader 4 chart template for this NZD/USD pattern. It can be traded using my free Chart Pattern Helper EA.

Update 2015-03-23 8:37 GMT: Bullish breakout trade triggered on an upward spike about four hours ago. The entry level is 0.76575, the stop-loss is 0.75477, and the take-profit is 0.80515. The position does not look good as of now. The spike was probably a false breakout:

NZD/USD - Ascending Channel Pattern - Post Entry Screenshot as of 2015-03-23

Update 2015-03-27 9:31 GMT: The pair’s pull-back has finally reached my position’s stop-loss level about two hours ago:

NZD/USD - Double Bottom Pattern - Post-Exit Screenshot as of 2015-03-27

If you have any questions or comments regarding this double bottom on NZD/USD chart, please feel free to submit them via the form below.

2 Responses to “Will NZD/USD Terminate Downtrend Upon This Double Bottom?”

  1. Jacek

    Hi. Is this trade running already?

    Reply

    Andriy Moraru Reply:

    Yes, if you refresh the page, you will see my post-entry screenshot.

    Reply

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