Short NZD/USD – Trade Closed

Trade Closed: 2007-05-09 23:20

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Greetings :) With the rhetoric virtually unchanged from the last meeting as the Fed keeps a laser focus on inflation, we saw USD slowly drift higher as traders price out the possibility of a rate cut. This was beneficial to our short trade and soon after the announcement our adjusted profit target was hit! Yay!

1st half: +19 pips
2nd half: +38 pips
Total: +57 pips

Trade Adjustment: 2007-05-09 12:37

We have less than two hours until the FOMC Interest Rate Decision. Because of the Fed’s strong stance on curbing inflation, I think we will either see neutral or hawkish rhetoric which is good for our short position. I would still like to avoid letting our winning trade turn into a losing trade, so we will do some adjustments.

Close half of position at market (currently at .7354) to lock in some profit
Adjust stop on remaining position to breakeven at .7373
Adjust pt to .7335 (May 4 low)

Good luck my friends :)

Trade Update: 2007-05-08 19:10

Our short trade was triggered yesterday evening at .7373 as the pair made a run upwards to .7400. Fortunately for our trade, the pair met resistance at .7400 and turned back down past our entry
point to its current trading level of around .7350. It looks like USD is making a run as reduce their risk by unloading their positions in higher yielding currencies and on the speculation that the Fed will carry a hawkish tone in the upcoming meeting. We will continue to hold onto this trade. Stay tuned for updates… good luck :)

Trade Idea: 2007-05-07 19:17

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Hello Everyone! Today’s trade is on the New Zealand Dollar. The Kiwi has been on a downtrend against the Greenback on recent US manufacturing data strength and profit taking on the recent run the Kiwi took on rising commodity prices, strength in the New Zealand economy, and carry trade flows. So, are we in a correction?

I think we are as the overall market sentiment still remains bearish on USD, but after making a run from about .6700 to around .7500 we may see the pair correct even further before traders jump back in long on this pair. Also, it looks like commodity prices have stalled as the major commodity index (CRB, Goldman Sachs Commodity Indecies) have met upside resistance.

The stochastics are starting to come out of overbought range, plus the pair bounced off of the 50% Fibonacci retracement level. We may see continued range trading ahead of the heavy amount of data starting on Wednesday, so I think we can get in at a better price at the 38% Fib level.

Short NZD/USD at .7373, stop at .7423, pt .7300

Please remember to risk no more than 1% of your account on each trade, so please adjust your position sizes accordingly.

Good luck :)

  • cyberRick

    Greeting Happy Pip,

    I enjoyed reading your post and I agree with your analysis on the NZD USD. I have taken this trade myself.

    Keep up the good work and good posts.

    have a great day.

    Cheers

  • cyberRick

    Greeting Happy Pip,

    I enjoyed reading your post and I agree with your analysis on the NZD USD. I have taken this trade myself.

    Keep up the good work and good posts.

    have a great day.

    Cheers

  • happypip

    Thanks cyberRick :)