All clear on the northbound route for Kiwi now that the RBNZ refrained from talking down the currency during this week’s policy statement. Here are my NZD/CHF entry levels.
Long NZD/CHF Idea
Earlier this month, I had my one good eye on this pair’s double bottom chart pattern but I hesitated to jump in a long position at market since I was seeing pretty strong resistance at the nearby .7000 mark.
I was also wary of potential jawboning during the RBNZ statement since the Kiwi has been soaring nearly nonstop since their previous announcement. However, head honcho Wheeler didn’t seem too worried about the currency’s high trading levels and its potential impact on inflation and trade.
To top it off, their official statement indicated some optimism about consumer spending and growth in the months ahead. This was enough to push NZD/CHF safely past the .7000 area of interest, which could hold as support again.
I’m setting my sights on the next resistance at the .7300 mark as my profit target and I’ve got my stop below the area of interest. This should give me room to exit early in case price falls below .7000 again.As for the franc, I’m turning bearish on this currency as risk appetite could extend its stay in the markets. Traders seem to be shrugging off the recent dips in commodities as market confidence got a very strong boost from the widespread shift to a hawkish or less dovish stance among major central banks.
Besides, there’s also some degree of uncertainty lingering over the entire European continent now that Brexit talks have already kicked off. This could keep a lid on the Swiss currency’s gains, especially since the SNB has repeatedly threatened to intervene in the forex market if the franc keeps appreciating.
Here’s what I have:
Long NZD/CHF at market (.7075), stop loss at .6925, profit target at .7275 for a potential 1.3-to-1 R:R.
I’ve only got 0.25% risk on the line for this nibbler position, though, and I’m planning on adding if the pair shows more bullish momentum past the .7100 mark.
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