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Ouch! That rising trend line on NZD/USD‘s daily chart broke, causing my trade to get stopped out. I guess Kiwi strength was no match to the ongoing risk aversion in the markets. I thought that the bailout package doled out to Ireland would calm those debt woes but it looks like traders still got the jitters!


I should’ve canceled my trade when the price popped after missing my entry. That was probably a sign that the retracement wasn’t strong enough and that Kiwi bears are really in control.

Anyway, here’s the damage:

P/L: – 125 pips / -1.0%

Trade Idea: 2010-11-24 1:30


Finally! After weeks of waiting, my long entry order for NZD/USD was finally triggered and I’m up by a few pips. Thanks to the recent run in risk aversion, spurred by the tension between the Koreas and the encore performance of the eurozone debt drama, NZD/USD dipped to my entry point at .7625.

I’m a little iffy about going long Kiwi since I heard that New Zealand just got a downgrade warning from Standard and Poor. However, I think the credit rating agency is just being extra stern lately since sovereign debt woes have resurfaced. New Zealand remains one of the better performing economies and I think they’ll be able to dodge an actual downgrade without having to implement austerity measures or asking for a bailout.

Besides, we could be in for a mid-week reversal as traders take profits ahead of the Thanksgiving holiday. Still, I’m keeping my eyes and ears peeled for the economic catalysts for the next few days.

Trade Idea: 2010-11-10 8:13


Do you know what gives me a sugar rush like Reese’s peanut butter cup? A sweet-looking Fib play on one of my oh-so favorite com-doll pairs!

Taking a peek at the charts, we see that NZD/USD could meet some support around the 61.8% Fibonacci retracement level where it has previously found resistance. I had to free my hand of that peanut-buttery goodness and scale back and see that .7625 is a major support and resistance level. And so, I decided I’d place a buy order at that price.

If my trade gets triggered, I’ll keep my chocolate-covered fingers crossed for the bulls’ sugar rush to last until NZD/USD hits my first profit target at 0.7840 which could be an area of interest. Ultimately, I’m hoping for the pair to end up back at the week’s open price and bag me a handful of green, tasty pips!

As for my stop loss, I placed it just above the psychological handle at .7505 after I noticed that on average, NZD/USD moves by 100 pips. Taking into consideration a little extra volatility, I set it 120 pips below my entry price to give my trade a little extra room.

But before I set my orders, I decided to check out the economic calendar first to see how New Zealand’s and U.S.’s economies are faring. Dollar domination has been the in-thing lately as risk aversion reared its ugly head back in the markets.

However, I think NZD/USD has a good chance of pulling up from its recent downtrend. Even though New Zealand ain’t set to release a single top-tier report in the next few days, I could still give a couple of reasons why the Kiwi could bounce.

One is that Australia, its Oceanic buddy, will be releasing employment figures soon, and if they print another increase in jobs, the bullish sentiment for the Aussie could carry on to the Kiwi. Another is that China is set to unleash a boatload of data tomorrow. Strong figures from this Asian giant could spur risk appetite once more, which could push higher-yielders up.

My entry order is still a bit far for now, but until those economic reports are released, dollar strength could persist and drag NZD/USD down to .7625. Oh hey, that happens to be near last month’s highs too!

Anyway, here’s what I’ll do:

Buy NZD/USD at .7625, stop loss at .7505, pt1 at .7840, pt2 at .7940. Of course, I’ll risk 1% of my account on this swing trade.

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