Euro Kiwi Trade Alert: Waiting for Fed Yellen

[indeed-social-media sm_list=’fb,tw,li,goo,xg’ sm_template=’ism_template_3′ sm_list_align=’horizontal’ sm_display_counts=’false’ sm_display_full_name=’true’ sm_disable_mobile=1 ]

EURNZD Technical Analysis

Fonterra,  the largest dairy products exporter in the world (based in New Zealand) upgraded its outlook for 2015 – 2016, which supported a strong New Zealand Dollar (NZD) in the Forex market. Although we re initially uncertain if the Kiwi will be supported in today’s session moderate gains were noted in NZD pairs and crosses. The probability for a rate hike this year has been reduced, which contributed to a weak US Dollar (USD) against a basket of currencies. The strong gains is preventing us from considering a long trade in NZDUSD as well as most NZD pairs and crosses such as GBPNZD. What is even more challenging is that Yellen speech is due at the daily close (21:00 GMT).

As Fed Yellen wishes to remain as ambiguous as possible in regards to the Fed’s monetary policy there is a fair chance she will attempt to hint a rate hike is still possible this year as opposed to her dovish press conference that followed the Fed’s decision to remain on hold earlier this month. A hawkish speech may send EURUSD lower but we would expect NZD to retain its bullish tone. The Catalonian elections on 27 September (Sunday) will probably show the desire for independency, which may weigh on the Euro at the opening of the markets on Sunday night although it is regarded by many as a non-event.

EURNZD Trading Strategy

The outcome is moderate selling in EURNZD. Please note we also observed GBPNZD but the current levels are too low for us to enter.

EURNZD Daily Chart

Please click on the chart to enlarge:

EURNZD Daily Chart 24/09/15

EURNZD Daily Chart 24/09/15

Although we are also combining the weekly chart we are anticipating a bearish breakout in EURNZD. The most difficult part of the trade alert is that we cannot enter at the daily close because of Yellen speech. The cross suffered from heavy losses, entering a short trade means we can incur an intraday ‘kick’ against our trade until the 21:00 GMT. The volatility in EURNZD also means we cannot implement a tight stop as the price can easily trade over +300 pips per day.

This is certainly one of our most challenging entries in the market. Although we provide the chart the trade alert is mostly based on the market fundamentals. The ‘kick’ we discussed earlier may easily be over 100 pips and we would like to emphasize that corrective gains are possible despite our bearish outlook for Euro Kiwi. Timing the entry is a difficult task even though we have used intraday time frames due to EURNZD volatility.

EURNZD Trade Alert Details

EURNZD short at market price (1.7767)
Take profit: 1.6970
Protective stop: 1.8013
Risk Ratio (RR): 1 : 2.8 (approx.)
Estimate duration: 7 days

24/09/15 UPDATE: EURNZD is trading at 1.7695 at the time of this writing. Please click on the chart to enlarge:

EURNZD Daily Chart II 24/09/15

EURNZD Daily Chart II 24/09/15

We are closing 10% of the short trade at market price.

24/09/15 UPDATE II:  EURNZD is trading at 1.7663 at the time of this writing. Please click on the chart to enlarge:

EURNZD Daily Chart III 24/09/15

EURNZD Daily Chart III 24/09/15

We are closing 10% of the short trade at market price.

24/09/15 UPDATE III:  EURNZD is trading at  1.7613 at the time of this writing. We are closing 20% of the short trade at market price and shift the protective stop to the entry. Please click on the chart to enlarge:

EURNZD Daily Chart IV 24/09/15

EURNZD Daily Chart IV 24/09/15

We will let the trade run into 21:00 GMT unless there will be significant selling until Yellen’s speech.  The reason why we liquidated 40% of the trade is because the price retrace earlier than we have anticipated. We were hoping Yellen will drive the price lower and take out the support level. That didn’t occur and EURNZD tested the support, attracting technical buyers into the market that lifted the price off its lows. Our short trade could be against the chart if EURNZD will post a 4hr close above the support, which is why we shifted our stop to the entry as a precaution even though our trade is based on the market fundamentals. We have successfully timed our entry as minimal drawdown has been incurred.

24/09/15 UPDATE IV: Yellen repeated that the Fed may hike rates this year (as we expected) and shoved EURUSD lower. However, NZD was not as resilient as we had anticipated.

Please click on the chart to enlarge:

EURNZD Daily Chart V 24/09/15

EURNZD Daily Chart V 24/09/15

You are probably noticing the swift correction that is taking place in EURNZD but we are already out of the trade. The fact the price reached the 4hr support before Yellen posed a moderate risk for a rebound. which is why the stop was shifted to the entry.

We have liquidated 40% of the trade with a decent profit. We are researching the markets and may issue a new trade alert. We will update you within the next 60 minutes.

Euro Kiwi Trade Alert: Waiting for Fed Yellen

As EURNZD short trade is closed this page can  now be accessed by all traders. Open trades are restricted to members only. We have been providing trade alerts in the Forex market since May 2014.
Euro Kiwi Trade Alert: Waiting for Fed Yellen

MEMBERSHIP PLANS INTRADAY STRATEGIES OUR TRADE ALERTS
Euro Kiwi Trade Alert: Waiting for Fed Yellen

performance4 edit1

Euro Kiwi Trade Alert: Waiting for Fed Yellen