Today I’d like to tell you about a currency pair that’s flying well under the radar even though I believe it has the potential to move at least 500 pips very, very soon.
And if it really gets moving … 1,500 pips or better.
That’s the kind of move that can add another zero to your trading account at one fell swoop. And the perfect setup is just starting to form right now.
So here it is: NZD JPY. Now, you may not have heard of this one before as the New Zealand Dollar against the Japanese Yen isn’t the first pair that comes to most currency traders’ minds.
But I promise you’ll be very glad you know plenty about it by the time you finish reading this article.
That’s because the Kiwi Yen is a perfect ‘coiled spring’ opportunity arising from two currencies poised to move strongly in opposite directions.
In fact, this is exactly the kind of trade I live for. Even after 23 years of successful trading on Wall Street where I was ultimately responsible for 1,200 trading accounts and 120,000 trades …
… well, this is still the best kind of trading excitement.
Why? Because you don’t often see a potential ‘coiled spring’ ready to release as large as this one. Normally I can and do find trade setups that move 100, 200, and 300 pips or more for my Pattern Trader members.
But this one should be much bigger and better.
NZD JPY is almost ready to trigger, and as a trader you owe it to yourself to be prepared for what could be the largest move yet in what’s already a very volatile (and profitable) January so far.
Taking the Big Picture View of A Super Trade Setup
First of all, let’s take a look at the monthly chart for NZDJPY. You’ll see there’s a double top near the 95 area and that the market has now sold off from that level.
It’s my view that this downtrend has a long way to go yet.
To see why, let me direct your attention to the head and shoulders formation that’s just being completed now. You can see the left shoulder and the head earlier.
Now the current right shoulder represents a very significant development which has traced out over a very long time just above the 75 level. As of this writing, NZD JPY is trading at 76.88 and beneath that is the neckline I’ve drawn at 72.
That neckline beneath the head and shoulders pattern is about 150 pips below the current price level.
And below that there’s a price gap around the 72 area. Price gaps are hugely attractive once key support or resistance levels have been broken.
So I believe there’s at least a 400 to 500 pip move to come in NZDJPY that will fill that price gap at 72 … and then some. The distance between the current 76.88 price and a very magnetic 72 level is 400-500 pips.
And that’s if it simply stops at that gap.
With the momentum in both NZD and JPY right now (I’ll show you in just a moment) the NZDJPY pair could shoots past 72 to go possibly much, much lower to 60, the bottom of its previous long-term channel.
If it goes all the to 60, that’s almost 1,700 pips from the current level!
A Tale of Two Powerful Currency Patterns That Could Yield A Massive Multi-Thousand Pip Move
Now let’s break apart the two currencies and look at them individually so you can see why I’m feeling so excited about this trade.
Here’s the USDJPY weekly chart. What I want you to take away from this is the appearance of a double top at 126 as I’ve highlighted with the red arrows. Plus a weekly head and shoulders too:
Note the neckline I’ve drawn to connect the recent lows at 116. That’s about 170 pips from current levels at 177.73.
All this is strongly suggestive that the JPY is still strengthening even against the very strong USD. If the USDJPY price penetrates that neckline then it will be well on its way to filling the gap at the 112 level.
Just as with NZD JPY, this is about 500 pips below the current price. The JPY looks to be getting much stronger across the board.
So why aren’t I focusing on the USDJPY pair instead?
Because there’s more — much more — that’s going on in NZD that I think you need to know about.
Now here’s the monthly NZDUSD chart. See how the price appears to have fizzled out twice at the 88 level to create a double top?
Just look at how the NZD moved after forming that double top against USD. After the price crossed the neckline near the 74 level there was another major drop to the 66 level. That’s where we’re trading right now.
And the most interesting thing is that it looks like things are setting up for yet another major leg down in NZD against USD.
If the support at 62 is cracked, it could open up the “bomb bay doors” all the way down to the old lows at the 48 to 52 level.
And that’s why I find the current situation in NZD JPY so compelling.
Both the NZD and JPY currencies are in strong long-term pattern moves in opposing directions. NZD is getting weaker and JPY is getting stronger — both against the normally very strong USD.
That’s an explosive situation and we really need to position ourselves for a great potential profit as it develops.
In fact, I’m very optimistic we’re going to see one of the biggest and best moves in some time in the immediate timeframe — and I’m saying that after taking 787 pips in profitable trades in just this month of January alone.
Yes, you read that right.
Pattern Trader members have started 2016 in the best of all situations. January has been outstanding for us, which is better than you can say for pretty much anyone in the stock market right now.
In fact, this kind of result really should make you step up and take a closer look at currency trades.
Instead of losing your shirt on stocks, you could be making some very tidy currency profits with less risk. Why be a sucker left holding the bag as the bottom drops out of the stock indices …
… when you could be making very profitable currency trades — and loving it?
Especially when you do it my way.
That’s because I always look for big moves poised to uncoil rapidly and explosively. It’s how I made my name on Wall Street. And it’s how I’ve racked up 787 pips in net gains in January alone for Pattern Trader members.
But you know what? Despite all that success we’ve enjoyed so far in 2016, NZD JPY offers the possibility of being the biggest and best trade yet.
See for yourself exactly how we’re going to play this huge move as a Pattern Trader member.
Capitalize on the upcoming NZDJPY mega-short and all the other high performance trade setups I see each day.