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NZD/USD

  • #6,581
  • Jul 13, 2014 1:12pm Jul 13, 2014 1:12pm
On the H4 TF the price is moving along with an uptrend and we are observing a reversal from the harmonic pattern area. If 0.8794 is broken below strongly, we are expecting to have the price dropped to the trend line.
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  • #6,582
  • Jul 13, 2014 1:33pm Jul 13, 2014 1:33pm
Quoting Ken A
{quote} Have you checked EUR/NZD?
Sorry brother, I missed this post till now. Yes I'm watching it for two levels here. By the SR, it would seem level two could be in the cards. Looks weak but...
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Ghost Rider - WWTBMD?
  • #6,583
  • Jul 13, 2014 5:32pm Jul 13, 2014 5:32pm
Quoting albchr
Please excuse the cross link here folks. I don't normally but rather than recreate... My view on NU http://www.forexfactory.com/showthre...50#post7600950
I've been short for a few days from .87932. The pair seems quite resilient, having tested .8800 at least a couple of times without meaningful penetration/follow-through (that's what she said). I was hoping to be able to bail before swap/rollover sucked the life out of the trade. I can understand why holding long as long as possible would be a benefit ... .
Fireworks are fun ... as long as you don't blow your fingers off.
  • #6,584
  • Edited 6:05pm Jul 13, 2014 5:43pm | Edited 6:05pm
Quoting shakiba
On the H4 TF the price is moving along with an uptrend and we are observing a reversal from the harmonic pattern area. If 0.8794 is broken below strongly, we are expecting to have the price dropped to the trend line. {image}
I'd agree with that assessment. In the alternative, I think a break below that level would signal its exit from a short-term range/consolidation:

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That being said, there might be some bull left in the pair, although I think the enthusiasm for that in the short-term is going to be capped by the July 2011 high of .8845. Simply put, I would not be long NZD at this level except maybe as an extremely short-term trade, since there isn't much air between current price and that level. My mistake was in attempting to call a top a little too early when indicators and such were still predominantly bullish. My current sentiment is that direction is somewhat unclear, since it has been bouncing around in this consolidation area for a few days now ... . A break below this range would clear the air, at least in the short term, as to direction.

For related reasons, I am also going to be cautious about entering any other NZD long trades, for example, a short GBP/NZD or short EUR/NZD at the moment, although I'm naturally keeping an eye on those. A break of the .88 area with follow-through could result in good long set-up's in GBP/NZD, EUR/NZD.
Fireworks are fun ... as long as you don't blow your fingers off.
  • #6,585
  • Jul 13, 2014 6:14pm Jul 13, 2014 6:14pm
Certainly a when not if - question is how long can the carry trade persevere in the face of deteriorating fundamentals in NZ and upswing in the US?

Whole milk prices have dropped by 30% this year (NZ's major export) which should cut $3 Billion from the economy, also just announced today that median house prices are beginning to fall. Inflation figures will be interesting...

Overview article here: http://www.interest.co.nz/currencies...mic-fundamenta

IMO the author often gets a little over excited in the short term but you can't deny the medium to long term picture.
  • #6,586
  • Jul 13, 2014 7:39pm Jul 13, 2014 7:39pm
Quoting SammyD
Certainly a when not if - question is how long can the carry trade persevere in the face of deteriorating fundamentals in NZ and upswing in the US? Whole milk prices have dropped by 30% this year (NZ's major export) which should cut $3 Billion from the economy, also just announced today that median house prices are beginning to fall. Inflation figures will be interesting... Overview article here: http://www.interest.co.nz/currencies...mic-fundamenta IMO the author...
Not forgetting the interest rate announcement on the 24th.....
Doing what you like is Freedom. Liking what you do is Happiness.
  • #6,587
  • Jul 13, 2014 7:41pm Jul 13, 2014 7:41pm
Well...If the rumors of buy on the rumors sell on the news is in effect. This NZD is in for a huge shortfall. Are people forgetting how small NZD really is in comparison to the other developed world? Are their biggest importers slowing down? Are the prices of milk going down? Are all the commodity based currency CAD, AUD under huge pressure? Can anyone tell me why this country is having this run? How or why their is inflation based on few numbers? Love to hear peoples thoughts...
  • #6,588
  • Jul 13, 2014 8:03pm Jul 13, 2014 8:03pm
Quoting kingleeny
Well...If the rumors of buy on the rumors sell on the news is in effect. This NZD is in for a huge shortfall. Are people forgetting how small NZD really is in comparison to the other developed world? Are their biggest importers slowing down? Are the prices of milk going down? Are all the commodity based currency CAD, AUD under huge pressure? Can anyone tell me why this country is having this run? How or why their is inflation based on few numbers? Love to hear peoples thoughts...
NZD has the most hawkish monetary policy AND huge interest rates! until either of these change, dont think we gunna get lower prices. Simple as that
All posts are my personal opinion
  • #6,589
  • Jul 13, 2014 8:12pm Jul 13, 2014 8:12pm
RTM I agree with you 100%on the huge interest rates and the carry trades that it has. However, people are positioned not for a day trade mostly and shorts don't hold long due to the high interest. However, it is having such a tough time beating the upper end of a higher high. you don't think there is no downside potential and a rather big correction in this one? I mean every central bank makes mistakes. They blamed Alan Greenspan for the hard landing and quite frankly the high interest rates can really hurt the GDP and production of workers in NZD. I mean we are talking about a very small populated country. The trickle effect is huge when we are dealing with such small numbers.
  • #6,590
  • Jul 13, 2014 8:15pm Jul 13, 2014 8:15pm
Seeing that you are responding at this hour I assume you are in Asia. I live near NZD and I would tell you the FEDs of EUROPE and USA are completely different than those of ASIA. They change their minds in heartbeat.
  • #6,591
  • Jul 13, 2014 8:32pm Jul 13, 2014 8:32pm
Quoting kingleeny
RTM I agree with you 100%on the huge interest rates and the carry trades that it has. However, people are positioned not for a day trade mostly and shorts don't hold long due to the high interest. However, it is having such a tough time beating the upper end of a higher high. you don't think there is no downside potential and a rather big correction in this one? I mean every central bank makes mistakes. They blamed Alan Greenspan for the hard landing and quite frankly the high interest rates can really hurt the GDP and production of workers in NZD....
Forex volatility has been SUPER low, like all time historic low, also make this pair even more attractive to buy and hold or simply just buy the dip. I dont see a downside potential in this at all, if anything it still can go some more. Until we get a major policy change or rate change not likely gunna happen. Just buy it until we get a major reversal, not 100-200 pips, 500 pip at least will need for this to confirm reversal. Check out ATR, like the VIX in SP500 when there is low volatility you can expect traders to go for complacent trades which is carry trade style for sure.
I am from the West side however I travel, I was in NZ couple months ago!
All posts are my personal opinion
  • #6,592
  • Jul 13, 2014 8:36pm Jul 13, 2014 8:36pm
Quoting Rtm
{quote} NZD has the most hawkish monetary policy AND huge interest rates! until either of these change, dont think we gunna get lower prices. Simple as that
Agreed regarding why NZD is so high right now. The past six months have largely been a one-way bet which combined with the size NZD USD interest rate differential have been perfect conditions for carry trade & accordingly significantly inflated the value of the NZD

The size of the differential won't change quickly - the chance that RBNZ will drop interest rates is near zero however the Fed will end up lifting rates at some stage - even if not till next year. So there's one ingredient to support further carry & hence elevated NZD however, the one-way bet is now coming off the boil meaning even if you're winning on carry you're going to lose out on the trade in the medium to long term as the USD rises.

If you knock the carry trade out from under the NZD then things won't be looking so pretty...
  • #6,593
  • Jul 13, 2014 8:42pm Jul 13, 2014 8:42pm
Thanks for the replies. It just too good and easy of a trade. it just never falls. Even when all the others got hammered this stood like a rock. Don't get me wrong I love easy money. Majority of the USD is strong yet. AUD and NZD with highest yields standing strong today. $$
  • #6,594
  • Jul 13, 2014 8:42pm Jul 13, 2014 8:42pm
Quoting SammyD
{quote} Agreed regarding why NZD is so high right now. The past six months have largely been a one-way bet which combined with the size NZD USD interest rate differential have been perfect conditions for carry trade & accordingly significantly inflated the value of the NZD The size of the differential won't change quickly - the chance that RBNZ will drop interest rates is near zero however the Fed will end up lifting rates at some stage - even if not till next year. So there's one ingredient to support further carry & hence elevated NZD however,...
Dont think we have any carry traders here, well not for NU anyway. I know we got lots of USDTRY or other EM exoctic pairs. I wouldnt be surprised if we break the highs anytime this week. Could happen tonight!
All posts are my personal opinion
  • #6,595
  • Jul 13, 2014 8:44pm Jul 13, 2014 8:44pm
Quoting Rtm
{quote} Dont think we have any carry traders here, well not for NU anyway. I know we got lots of USDTRY or other EM exoctic pairs. I wouldnt be surprised if we break the highs anytime this week. Could happen tonight!
Just checked my USD/TRY spread. It's a whooping 22 pips. WTF. Is this normal?
  • #6,596
  • Jul 13, 2014 8:45pm Jul 13, 2014 8:45pm
Quoting msfu
{quote} Just checked my USD/TRY spread. It's a whooping 22 pips. WTF. Is this normal?
Yeah thats pretty good
All posts are my personal opinion
  • #6,597
  • Jul 13, 2014 8:51pm Jul 13, 2014 8:51pm
Quoting Rtm
{quote} NZD has the most hawkish monetary policy AND huge interest rates! until either of these change, dont think we gunna get lower prices. Simple as that
Agreed. Fitch also thinks so as they said last week when they upgraded NZ. About the only spanner in the works I can see in the near future could possibly be a change of govt at the upcoming general election....whether that will happen is something that we will just have to wait and see.

For those picking tops here....do your research. Picking tops and bottoms is a fools game....always will be. There is no reason to sell NU at this stage, there is no bear signs whatsoever. Simply saying 'the Kiwi is too high' is stupid. People said the same of the Yen a year or two back....the currency doesn't know what 'too high' means....it will go as high as the market determines because the market rules!!
Doing what you like is Freedom. Liking what you do is Happiness.
  • #6,598
  • Jul 13, 2014 9:25pm Jul 13, 2014 9:25pm
Quoting realjumper
{quote} Agreed. Fitch also thinks so as they said last week when they upgraded NZ. About the only spanner in the works I can see in the near future could possibly be a change of govt at the upcoming general election....whether that will happen is something that we will just have to wait and see. For those picking tops here....do your research. Picking tops and bottoms is a fools game....always will be. There is no reason to sell NU at this stage, there is no bear signs whatsoever. Simply saying 'the Kiwi is too high' is stupid. People said the same...
Couldn't have put it any better in traders terms!
All posts are my personal opinion
  • #6,599
  • Jul 13, 2014 9:36pm Jul 13, 2014 9:36pm
Quoting realjumper
{quote} People said the same of the Yen a year or two back....the currency doesn't know what 'too high' means....it will go as high as the market determines because the market rules!!
About sums it up RJ
Ghost Rider - WWTBMD?
  • #6,600
  • Jul 13, 2014 9:56pm Jul 13, 2014 9:56pm
Gidday NZ

Started taking longs

Got a few wins

short at 0.88

Bit weary off getting caught at these lofty heights
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