Kiwi Trading Strategy: The Technical Framework

NZD Trading Strategy

The Japanese yen was heavily sold in recent sessions. The market is pricing-in the possibility of further Quantitative Easing (QE) measures by the Bank of Japan (BOJ) at the end of July, 2016. There is no guarantee Japan’s central bank will ease but it is not preventing the markets from pricing it in. The JPY selling wave began when Abe won a majority in the upper house following the elections that were held over the weekend.

We have initiated a long trade in EURNZD but the cross was unable to post significant gains. We may have a new entry following today’s session.

EURNZD Daily Chart

Please click on the chart to enlarge:

EURNZD Daily Chart 12/07/16

EURNZD Daily Chart 12/07/16

The recent weakness in Euro Kiwi may have provided a technical, bullish entry in the cross. There are numerous scenarios on what may be the trigger. There is an element of risk to the trade as we are uncertain if NZDUSD is ready correct lower. EURNZD could still rise due to a strong Euro rather than a weak NZD. As we are uncertain on our projection for NZDUSD we are uncertain whether this trade should be taken. What is tempting however is the size of the stop. We would like to clarify this is not USDJPY where we deliberately used a tighter stop. Although we must wait until we near the daily close the stop may range between 80 – 100 pips (approx.).

EURNZD is a volatile cross and it is a relatively tight stop. The reason why we currently prefer waiting for the daily close is to avoid the negative interest. However, the entry does not require a daily close as the signal was already given. At the time of this writing we are still debating whether to wait for the daily close or enter beforehand.

EURNZD Trade Alert

Please click on the chart to enlarge:

EURNZD Daily Chart II 12/07/16

EURNZD Daily Chart II 12/07/16

EURNZD long at market price (1.5142)
Take profit: 1.5550
Protective stop: 1.5032
Risk Ratio (RR): 1 : 4 (approx.)
Estimated duration: 7 days

13/07/16 UPDATE: EURNZD is trading at 1.5241 at the time of this writing.

Please click on the chart to enlarge:

EURNZD Daily Chart 13/07/16

EURNZD Daily Chart 13/07/16

we are closing 30% of the long trade at market price and shift the protective stop to the entry.

14/07/16 UPDATE: EURNZD is trading at 1.5467 at the time of this writing.

Please click on the chart to enlarge:

EURNZD Daily Chart 14/07/16

EURNZD Daily Chart 14/07/16

We have decided to exit the trade, finishing the long position with a decent profit.

Kiwi Trading Strategy: The Technical Framework

As EURNZD long trade is closed this page can now be accessed by all traders. Open trades and relevant intraday strategies are restricted to members only. We have been providing trade alerts in the Forex market since May 2014.
Kiwi Trading Strategy: The Technical Framework

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Kiwi Trading Strategy: The Technical Framework

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Kiwi Trading Strategy: The Technical Framework

Last Updated on July 28, 2016