SHORT GBP/NZD
@ 1.8232
SL @ 1.8532
alternative pair to take advantage of RBNZ rate decision will be NZD/CAD
because we expect NZD to re-gain strength after the expected rate decision while we also expect the WTI to continue its downtrend, if all work out, we will see large buying into NZD while large selling into CAD. Moreover, CAD also had 2 negative data from last Friday job data and today's building permit.
The risk is the same as if RBNZ cut rate further than 0.25%, and another risk is the WTI gains more strength on the Crude oil inventory data on Wednesday and/or API data on Tuesday night.
technically we also had a pin bar now.
LONG NZD/CAD
@ 0.9418
SL @ 0.9318
- We're still trading the strength from last week USD NFP and the whole equity markets especially Nasdaq & S&P all made new high. The risk sentiment is on while the WTI market also picked up a little due to OPEC output restrain rumor.The current risk will help high yield asset such as NZD & AUD, while GBP normally would be benefit but now suffered the negative sentiment from BOE rate cut and expansion of QE. RBNZ will announce a rate decision on Wednesday which market has already priced in a 100% cut and if the rate is cut to 0.25% as expected, we will actually see a reverse rally in NZD as now the uncertainty has removed and the rate of NZD still remains the highest among all other currencies. If the risk on sentiment continues, NZD will be bought. If the risk sentiment shifts to negative, NZD will be sold but so as GBP. We pick GBP/NZD to take advantage of the possible buying power into NZD after Wednesday's rate cut decision if it is as expected and also we minimize the risk of sentiment as both currencies are in the same risk sentiment category. Fundamentally speaking, NZD is doing much better than GBP and people have already expected NZD to cut rate, so unless they cut it further to 0.5% this time, otherwise if the expectation is met on Wednesday, people will resume buying NZD while selling GBP. We also have a kangaroo tail after a bearish candle last week.
- The catalyst is the RBNZ rate decision.
- We're actually at an oversold territory but as mentioned before, UK left EURO ZONE was a historical event so don't be surprise to see price making new low/high
- The risk is the RBNZ cut rate to more than 0.25% or introduce any new QE. If that happens, then this trade is no longer valid.
- I'll manage until Wednesday's RBNZ decision and if it is as expected, i'll looking to add on more
- This is a good trade call if you're still flat with GBP OR NZD
SHORT GBP/NZD
@ 1.8232
SL @ 1.8532
alternative pair to take advantage of RBNZ rate decision will be NZD/CAD
because we expect NZD to re-gain strength after the expected rate decision while we also expect the WTI to continue its downtrend, if all work out, we will see large buying into NZD while large selling into CAD. Moreover, CAD also had 2 negative data from last Friday job data and today's building permit.
The risk is the same as if RBNZ cut rate further than 0.25%, and another risk is the WTI gains more strength on the Crude oil inventory data on Wednesday and/or API data on Tuesday night.
technically we also had a pin bar now.
LONG NZD/CAD
@ 0.9418
SL @ 0.9318
