Forex pairs have been moved wildly unpredicted at the end of the Year 2019. There was a big surge of a bullish move on the last day though. In January 2020 the market is not yet traded normally. Nevertheless, it is good to mark the market structure to anticipate the possible move in January.
Following is the GBPNZD Daily Chart
On Daily Chart, GBPNZD pair has run a huge bull took out a previous high then reversed bearishly. The trend has clearly reversed to bearish. It is a wise strategy to only look for a short trade.
A good area/level where to look for a setup trade short is at the red-dash line where support turned to resistance. While for the take profit level, there are three possible levels. The First support level is the gold-dash line, the second level is the red-dash line, and the third level is the lower channel – green dash line or the lower green-dash line – the support line. The move is around 1.400 pips.
The green-dash support line was unique. It was a manipulation level where the price was driven down heavily by institutions taken out stops – stop hunt. The green dash line is a mitigation level where the institutions should have driven the price to visit that level in order that the institutions can mitigate/exit the position that they used to drive the price down. It will be a good level for a take profit.
Below is the GBPNZD 4 hour chart:
In the picture above, the blue-dash line is our level of interest. It is a confluence level of Support turned resistance and level of institutions mitigation. In the context of price manipulation, the institutions do not mind to temporary drive the price up a little bit in order to have a better price level before heavily driving the price down. The price later often re-visit the level to mitigate the position they use to drive the price up. Therefore it is a good idea to take a closer look at the price action when it visits the blue dash line.
Only take the trade if price confirms itself. Price is the main indicator itself. Remember that price structure is merely a structure. The best strategy is having no opinion on the market: sell it when it looks it is going down.