Trade Closed: 2008-11-17 08:45
Good morning! My remaining position was closed last week as we saw a burst of risk buyers pushing NZD/USD up to my adjusted stop at .5735.
1st Half: +145 pips
2nd Half: +200 pips
Total: + 0.86% gain
After stopping out, NZD/USD found sellers once again to push the pair to its current levels around .5550. It looks like the selling sentiment is still strong, but we may continue to see support around the psychological level of .5500. With lack of any significant news today, look for technicals and sentiment to influence price action.
Stop Adjustment: 2008-11-12 11:28
Time to adjust my stop once again as we see another big push downward on the Kiwi as the pair hits lows around .5550.
Adjusting stop on remaining position to .5735 to lock in 200 pips. Will trail stop by 200 pips from this point on and remove profit target. Next stop adjustment is at .5335.
This is a pretty significant move for NZD/USD, so we may see a bit more retracement on profit taking, possibly all the way up to .5700. I look to continue to hold on the idea that we still have further to see in global growth weakness and possible rate cuts from the RBNZ. Stay tuned!
Stop Adjustment: 2008-11-11 14:20
Hello! We saw more risk aversion today as higher-yielding currencies and carry trades continued to sell off as traders continued to price in slowing global growth. NZD/USD fell as low as .5695, so I’d like to make another adjustment to lock in further profits.
Adjust stop on remaining position to .5835 to lock in 100 more pips. Will trail stop by 100 pips from here and continue to target second profit target at .5350.
Trade Adjustment: 2008-11-10 16:05
Hello! The week started off with a bit of a scare as NZD/USD gapped up at the open of trading. There was a surge of risk appetite after the Chinese government pledged a huge stimulus package, over $500 billion, to boost their economy. This rally was short lived and ended up being another opportunity to short the pair. Sellers jumped in strong, pushing the Kiwi down over 200 pips to its current level, just under .5800.
The pair is now testing a minor support level. I’m not sure if it will hold again or not, so I have decided to lock in some profits.
Close half position at market (.5790) to lock in profits. Adjust stop to breakeven at .5935.
I will continue to hold as I feel risk aversion will continue to play a big part in price action as economic data remains light for both New Zealand and the US until Thursday. Stay tuned!
Trade Update: 2008-11-07 18:13
Greetings everyone! It’s the end of the trading week and I thought I’d give a quick summary on my short position on NZD/USD.
After my post, the pair rallied back above the rising trendline, but it was short lived as sellers pushed the pair down after hitting around .6050. The pair made a low around .5800 and retraced to its closing levels around .5900.
US jobs data came much worse than expected with NFP reading at -240K jobs lost in October and a higher revision of jobs lost to September’s number. While the markets saw quite a bit of volatility the pair pretty much ended were it started and treaded lower as traders continue to price in economic weakness.
I will continue to stick with this trade, but looks for adjustments. I think volatility is slowly creeping down as the markets calm, and my exit strategy may need to be readjusted. Stay tuned!
Trade Idea: 2008-11-05 22:52
Good evening! A simple technical play has formed on NZD/USD that I’d like to play. Time to short again?
It really can’t get any more basic than this chart setup, which is basically a rising trendline break. The pair has found support in a short term rally along the trendline drawn on the chart, but this time the buyers were no where to be found. The pair has broken the trendline to the downside and we may see another leg in the downtrend.
Fundamental news has just been released in New Zealand with the jobless rate rising to five year highs in the third quarter. Economic weakness is returning into trader’s focus, and it looks like the more bad news we see, the more traders will price in further rate cuts from the RBNZ.
So, fundamentals are confirming the downtrend, and we have a technical signal of a possible return to the downside. Here’s how I’m going to short:
Short NZD/USD at market (.5935), stop at .6135, pt1 at .5735, pt2 at .5350
Remember to never risk more than 1% of a trading account on any single trade. Adjust position sizes accordingly.
Stay tuned for updates!