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Trade Closed: 2013-11-28 00:01

Wherefore art thou Kiwi bears?! As I mentioned in my Twitter update, I considered closing my short NZD/USD position early because price was just stuck around the large area of interest between .8150 to .8200. I suppose this means that, even if fundamentals and technicals lined up for a short bias, there still aren’t enough traders willing to short the Kiwi at this point.

nzdusd

I also mentioned in my trade plan that I will be closing early if U.S. data comes in weak. After all, one of the reasons why I decided to short this pair was that U.S. reports seem to support the idea of a Fed taper in December. With that, I was expecting to see a dollar selloff if U.S. durable orders data disappoints… and it did!

Here’s how it turned out:

+10 pips / +0.02%

I know, I know… It’s a measly gain but it’s better than a loss! Besides, the percentage gain was a tad larger but I gave up some of it because of the negative carry. Overall, I’m pretty happy with my decision and I think I might be better off moving on to another trade for now. Do you agree?

Trade Idea: 2013-11-25 8:58

I may have missed the chance to jump in that massive AUD/USD selloff so I ain’t passing up the chance to catch another potential comdoll slide. After breaking below the key .8200 handle last week, NZD/USD pulled up for a quick retest of that area so I hopped in and crossed my fingers that it would head back south!

nzdusd

As Big Pippin pointed out in today’s Chart Art, NZD/USD could find resistance at the 38.2% Fib, which is close to the broken support at .8200. Stochastic already reached the overbought levels and might cross down soon, but I did leave enough leeway for a higher retracement to the 50% or 61.8% Fib levels.

I’m bearish on this pair because the RBNZ keeps emphasizing that the Kiwi is overvalued. They did say that they can’t afford to intervene and that monetary policy can only go so far in terms of pushing the currency down, which suggests that they’ll grab every chance they get to just keep jawboning.

As for the U.S. dollar, the return of the taper theme could keep it supported, especially since the Fed seems to be the only major central bank thinking of reducing stimulus at this point. Of course I’ll keep track of upcoming data and central bank events which might cast doubts on the Fed taper again.

Anyway, here are my trade deets:

Shorted NZD/USD at .8200, stop loss at .8300, ultimate profit target at .7725.

I’ll be risking 0.5% of my account on this trade but I’ll be looking to add to my position if opportunities come up. Do you think NZD/USD can go all the way down to test its yearly lows? As always, I enjoy getting feedback from you guys so keep those comments coming!

Happy time

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