NZD - A disaster waiting to happen

I've no idea about fundamentals, but I was looking to short it at 1.17+ (actually did, stop was a weeeee bit small back then. Got frustrated at irrational price behavior and eventually reshorted a bit later at 1.1500
I've really no idea about any canadian fundamentals, but the chart said dive.

I agree with Kaz; NZD is plain too expensive at this level.

Kaz, what price you short it at?

http://www.stuff.co.nz/4039082a10.html

Newspaper article on the rate hike.

I'm not sure if it'll have any long term effect really. These pairs seem to defy reality to me.

There is still good interest to be earned on the AUS but we will be starting to look at the possability of the AUS depereciating. In that instance there is no point earning interest on a depreciating currency? %5 interest doesn't mean much if the currency depreciates by 10 - 20%.

Based on todays movement there are still buyers in the market but I think the sellers will start to win over now based on the longer term interest rate forecast and possability of the AUS depreciating back to 8000 in the short term.

If the market moves back through the 8405 then who the hell knows. Personally I like the Risk Reward ratio on the sell side based on the fundamentals and wavering price action.

The 25bp rate increase was expected by about 50% of the economists surveyed. The really interesting part came afterwards when the RBNZ hinted at a possible intervention.

The RBNZ statement included a warning that "The exchange rate is now at levels that are both exceptional by historical standards, and unjustified on the basis of medium-term fundamentals." The RBNZ has four criteria for justifying intervention:

1) the exchange rate must be exceptionally high or low

(2) the exchange rate must be unjustified by economic fundamentals

(3) intervention must be consistent with the Policy Targets Agreement (i.e. achieving the inflation target)

(4) conditions in the market must be opportune.

NZ is in a difficult position; they depend heavily on exports and those exports have been hurt by the rise in the Kiwi. On the other hand, it would be very risky for a bank to weaken a currency while it's economy is in an inflationary phase, as a depreciating currency tends to fan inflation pressures.

It almost seems as if the bank is getting desparate. They've been forced to raise rates beyond what they would like to see and this of course has had the effect of attracting investors looking to capture the yeild differentials.

An economic Catch-22 if ever there was one!

Although a reshort of the now 4 times tested high prolly would have been nicer

Here's 60 pips so far saying you were right

Let me scale out some at 95 ( pivot support) + 45 pips
waiting 8240 now for the rest stop break even at 8340

AUD/USD & NZD/USD have started behaving as we would love them to. The update on the positions is as follows:

AUD/USD= + 56 pips

NZD/USD= + 58 pips

I have entered long USD/CAD pair. One full lot.

Entry =1.1149

Stop = 1.1000

Limit = Ist target = 1.1450
2nd target = 1.1600

Goodluck

KAZAM

I envy you have shorted it regardless of the price.. I was waiting for 0.75 but it never came. CRAP.

Then I waited at 0.7485, and it went up to 0.7484! CRAP AGAIN.

Jezz i guess, I can still short it now with a small lot and wait with a limit sell @ 0.7450

Will be interesting to see the the buy back reaction from today. I think if there is not sharp rebound then the sellers are winning!

I currently have pyramided down from 8034 adding at most 5 min stochastics cross from the 80. This has worked me into a good position with 5 lots sitting from 20 - 50 pips up. If there is no rebound today or tomorrow to 8360 then hopefuly I will hold these for the longer term.

The reason i started this thread was, i wanted the traders to be proactive not reactive. You need to be ahead of the crowd & make the move based on solid analysis & fundamentals. I want you to keep an eye on the forex news section. You will see a lot of people, trading groups now coming up with ideas to short NZD/USD. To me that is too late. Every one can be smart after an event. That does not help the trading, therefore i want to tell the crowd dont pay attention to these reviews & ideas after the event has happened. NZD & AUD will keep on bouncing every now & then, but the ultimate direction is down. I will still keep my stops at original level.

KAZAM

My short was 100% technical and not fundamental because it is very hard to find the top on an irational moove.
My 40 target is now very close i will scale out 1/3 and let the last third running till 0,80 for next friday

Kiwi chiming in here.

The majority of us will sit around and smoke blunts and give a *%^$ about the economy.

I'm +78pips on a short. But unfortunately I think NZD will bull up again in 3-5 days...
Best trade I've had in weeks.... and made perfect TA sense.

Go the All Blacks!

This is what I say. You can be fundamentally correct and still lose as the market does what it wants. Still, I greatly appreciate Kzazs' rational analyses.
As I write this, NZDUSD and NZDJPY have bounced off their day lows. I would not short unless they broke those lows. But I am not a long-term player.

out at 0,8242 finally 40 seems to support ( +98 pips)
remaining 1/3 of the position target 0,80 stop at 0,8276 now

Bit messy for a descending TL, but I assume news and stop popping had to do with this...still obeying it currently, a close below and the lower one might get tested.

Yes, these are completely arbitrary

Just wanted to post something possibly useful from me

This is shafting me...badly

Good call on that exit, my initial target was only a few pips beyond that level. I didn't want to hold through GDP, too late now..

I am short again at 0,8295 now when it rebreaked 0,83 after hitting 8340 ( i missed the short at that level ( was my first short 2 days ago).
Should go down again this week . I get a very bearish technical bias now again

First target 0,8242 for 1/3
second target : 0,8202
third target : 0,80
if 0,82 is broken i short one more third ( the one i exit at 8202)

STop 0,8246

IF 0,8242 hitted short on BE