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FxWirePro Call Review: Maintain short positions in NZD/USD; next target looms at 0.62

We are kiwi bears and its bearing fruit,

Background:

Back in March 2018, in an article named, “FxWirePro: Sell NZD/USD for attractive risk: reward ratio”, available at https://www.econotimes.com/FxWirePro-Sell-NZD-USD-for-attractive-risk-reward-ratio-1206976 we urged our readers to sell NZD/USD at the then current rate of 0.725 (which is near the range-high) as Kiwi has been struggling in a range of 700-800 pips with a target of 0.675 area.

Later in a follow-up review, we extended the target from 0.675 to 0.65 area, as we suspected that the current semi-dovish (no hurry to raise rates) stance of the Reserve bank of New Zealand (RBNZ) is helpful to our call.

And finally, based on our latest calculations, we extended the short side target from 0.65 area to 2015 bottom around 0.62 area, https://www.econotimes.com/FxWirePro-Call-Review-Kiwi-likely-to-test-its-2015-bottom-against-USD-1392243 and then we have further extended to 0.59 area.

Trade idea:

  • After reaching 0.64 area in September last year, the NZD/USD reversed course and tested 0.7 resistance area. Since November last year, the pair has been consolidating in a tight range of 300 pips (0.668-0.698).
  • The range is finally broken this week with NZD/USD undergoing a sell-breakout. Key fundamental influencing the pair; strong USD, dovish RBNZ, the weaker outlook for exports from New Zealand due to a slowdown in China and the European Union, and stricter trade policies of the United States.
  • As the range is cleared, NZD/USD is sharply moving lower and we expect our targets to get reached. The pair is currently trading at 0.659 area.

 

  • Market Data
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