Tagged "NZD/USD"

6-4-08

21:57 GMT – RBNZ signalled that they would begin lowering interest rates by the end of the year to combat a softening economy. With Bernanke of the Fed signalling a stop or even a raise of interest rates by the end of ’08 look for the NZ to continue to weaken against the USD as “smart money” (big banks using carry trades) begin to pull out of this pair in favor of more stable pairs. This could be the start of a downtrend in this pair for a few years.

After the announcement the pair immediately dropped over 100 pips to .7700

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7:15a GMT – Pair has reached resistance in the form of a downward trendline that is currently just above .7750. Possible divergence in the RSI hourlies makes me nervous but this is the third time that resistance has been tested over the past 30 days.

Trading Idea: wait for candlestick signal then sell near resistance. Volatility is low so a 20-25 pip stop above resistance should suffice.

UPDATE – 21:47 GMT – No bearish candlestick confirming the bounce off of resistance was ever seen and no trade was entered. Pair is currently consolidating around .7750 as the market decides which direction this one is going. Most 60M support and resistance lines have been trashed. Volatile entry orders above and below might be a good way to take advantage of this scenario and treat it like a squeeze play.

23:42p GMT – Placed breakout flagpole entry above current NZD/USD consolidation and trend channel resistance. RSI shows positive trend but Slow SS shows mixed signals on the 60M charts.

Buy – 0.7655
Stop – 0.7630 (25 pips)
L1 – 0.7680 (25 pips, raise second stop to break even)
L2 – 0.7705 (50 pips)

UPDATE – 7:05a GMT – Pair is still consolidating horizontally to resistance at 0.7650. The pair has not made any deep stabs to challenge Fibonacci 38.2% retracement so I am keep the signal and entry orders in place for now.

UPDATE – 7:45a GMT – Resistance was broken and entry points were hit to trigger the trade so PipHut.com is now active in this trade.

UPDATE – 8:21a GMT – First limit hit for 25 pip profit (equal to risk)! Second stop raised to break-even for a risk free shot at 50 pips.

UPDATE – 8:32a GMT – Second limit moved down 10 pips to 0.7695 due to expected resistance at .7700

UPDATE – 18:48p GMT – Second limit hit for additional 40 pips. Trade closed.

Signal Result: +65 pips profit!

Breakout/flagpole entry order placed below current NU consolidation after flagpole. Entry placed 5 pips below large round # .7550. Small flagpole, only 60 pips. Possible negatives include an RSI divergence on the 60M and strong support at 0.7500 scaring off the downward push.

Entries placed at 4:26 GMT.

Sell – 0.75450

Stop -0.75700

L1 – 0.75200

L2 – 0.75050 (5 pips above next support level)

UPDATE: 7:41 GMT, pair has broken to the upside and I am cancelling my entry orders. Good no trade.