RB New Zealand drop cash loan rate quarter of a point to 8% even. Kiwi drops like a stone. NZDUSD hits 6 month lows and AUSNZD hits all time highs. RBNZ hints at further rate cuts to come even tho they expect inflation rate to grow to 5% in Sept from 4% this past June. Apparently they are looking for ways to expand heir mandate of not just controlling prices but now trying to stimulate a weakening economy.
Anyone setting up to short this on the next retrace upwards? I'm looking to either play a bounce off the .75 figure or if that is broken, begin scaling in shorts at .76 on up to the daily downward trendline.
I must be missing something here, why would you want to short a yield of 8%, it's a good carry trade isn't it? I've been buying the dips and grid trading it against the Yen, seems like a no-brainer to me so I must be missing something
- I'm just looking at the pure technical aspect of the pair and it's current downtrend. - I won't be holding a longterm short position and thus am not so concerned with the negative interest. Let me know what you think Cable...I'm a newer trader and stick with what I know (or think I know, ha!). As the pair retraces and approaches the upper (downward) trendline, this looks like a perfect short opportunity and one that I've already played a couple of times over the last few months. With the NZ economy coming to terms, I can enjoy the peace of mind of both technicals (daily downtrend) & fundamentals (NZ economy hurting, further rate cuts, etc) lining up. Thoughts, etc? I'm here to learn
Right, I see. So what do you have in mind for a target, 0.7320/0.7266? Oh eh I'm no expert on the Kiwi, mine is purely a yield play and the dip seemed too good to miss against Yen. I would say if what you're doing is making you money then don't change it. Like you say, you have technicals and fundamentals on your side and you're comfortable with the trade and the strategy so it must be right. I'm not good with anything longer term than intraday so I'm not the best person to offer any advice
Long term, possibly...but I would probably close the majority of my position out right before we hit .74, especially if that serves as the end of this last drop on the hourly on the latest leg down (making it a double bottom, I believe?....tracing back to Jan08 lows) and keeping some position on for the rest of the ride. Honestly though, I had not planned accordingly for the high negative interest that would be involved in holding a trade for larger gains (ie more than a couple of days) so that will be something that I'll have to look into. I think the last couple of times that I shorted the NZD, I was out after 48 hours. Good point though Cable and I appreciate your input on this. The negative interest didn't even come to mind.
I'm sorry I brought it up now, I hate encouraging anyone to second guess their trade! You sound confident enough in your strategy to ignore it if it's not relevant. I'm just wondering if the move down has been an unwinding of the carry trade (covering longs as opposed to new short positions), that would certainly leave a lot of uninvested money lying around waiting.
No, not at all. You provided another view into the trade and I've come to terms with the fact that you can often have two opposite views on a pair, make the opposite trades and both parties still pull away with fair profit >>> Timing & money management is 80% IMO. I'd ask you to share more information in regards to your strategy but I assure you I'd come away more confused than knowledgeable! Cheers man and I'll be sure to post up when/if I take any positions.
Yes do, it's always good to see what other traders are thinking and doing. Just looked at a 15 min chart and 7395/7389 looks like a nice short target, or even 7380'ish but then I'd long from there and only be after 20-odd pips back to just above where it is now. This is what I love about this game, you're short, I'd go long, both on different time frames and with totally different strategies and we're both making money! Good trading bud
bump...looking to draw some feedback on the fib levels from the latest drop. My eye is on the 50% level for a retracement...no major news on the NZD side to stop the retrace... Thoughts?