The Weekly Update: NZD and the Consumer Price Index

The price range of many currency pairs and crosses has persisted longer than we have anticipated. The speculations on the Brexit negotiations, potential rate hike by the Fed and the upcoming US elections are sustaining the range in the market. Initiating a medium-term trade means holding onto the trade for some time as we have done in our recent trades. We are waiting for a stronger confirmation the longer term trend is due to emerge. The next major event for GBP is the BOE monetary policy that is due in November, which is likely to trigger a strong reaction in all GBP pairs and crosses.

As we updated last week there are early indications USD is due to weaken in the market. EURUSD weekly close suggests we should focus on the commodity currencies against the US Dollar. There is no entry in AUDUSD or USDCAD, which leaves us with NZDUSD. The recovery is expected to be temporary as the monthly trend suggests further weakness is due as we clarified in the prior research. The RBNZ

NZDUSD 4hr Chart

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NZDUSD 4hr Chart 16/10/16

NZDUSD 4hr Chart 16/10/16

NZDCHF 4hr Chart

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NZDCHF 4hr Chart 16/10/16

NZDCHF 4hr Chart 16/10/16

The natural trigger would be the CPI that is due later this week. NZDUSD (which is also supported via the daily chart) recent dip may be capitalized on by initiating a long trade with a relatively tight stop. NZDCHF provides a similar entry on the 4hr chart, however, it is not supported via a longer time frame.We are considering opting for both trades due to the size of the stop but we are favoring NZDUSD over NZDCHF. We will wait for the opening of the Forex market in order to determine how we wish to proceed.

NZDUSD Trade Alert

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NZDUSD 4hr Chart II 16/10/16

NZDUSD 4hr Chart II 16/10/16

NZDUSD long at market price (0.7090)
Take profit: 0.7215
Protective stop: 0.7034
Risk Ratio (RR): 1 : 2,3 (approx.)
Estimated duration: 4 days

NZDCHF Trade Alert

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NZDCHF 4hr Chart II 16/10/16

NZDCHF 4hr Chart II 16/10/16

NZDCHF long at market price (0.7018)
Take profit: 0.7133
Protective stop: 0.6979
Risk Ratio (RR): 1 : 3 (approx.)
Estimated duration: 5 days

17/10/16 UPDATE:  NZDCHF is trading at 0.7048 at the time of this writing, we are closing 30% of the long trade at market price. NZDUSD is trading at 0.7132 at the time of this writing, we are closing 30% of the the long trade at market price.

17/10/16 UPDATE: NZD posted moderate gains following the CPI, however, the figure is still inline with the RBNZ expectations, which may not necessarily prevent a rate cur in the upcoming monetary policy meeting.

Please click on the charts to enlarge:

NZDUSD 4hr Chart 17/10/16

NZDUSD 4hr Chart 17/10/16

 

NZDCHF 4hr Chart 17/10/16

NZDCHF 4hr Chart 17/10/16

We are closing both trades at market price (NZD gains continued during the European session but we already closed the trades).

EURGBP Trade Alert

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EURGBP 4hr Chart 17/10/16

EURGBP 4hr Chart 17/10/16

If the weakness does not begin during the Asian session we may incur a kick to 0.9060 (approx.). What we have is mutated form of H&S on the 4hr chart. We suspect the UK CPI may be the initial trigger for the weakness.

EURGBP short at market price (0.9023)
Take profit: 0.8850
Protective stop: 0.9116
Risk Ratio (RR): 1 : 2.3 (approx.)
Estimated duration: 4 days

17/10/16 UPDATE II: EURGBP is trading at 0.8926 at the time of this writing.

Please click on the chart to enlarge:

EURGBP 4hr Chart 18/10/16

EURGBP 4hr Chart 18/10/16

We are closing 50% of the short trade at market price and shift the protective stop to 0.9000.

19/10/16 UPDATE: As noted in prior updates, there is a high risk for a whipsaw reaction in all EUR pairs and crosses. We decided not to risk +100 pips for an additional +100 pips.

Please click on the chart to enlarge:

EURGBP 4hr Chart 19/10/16

EURGBP 4hr Chart 19/10/16

As this is an intraday entry we are closing EURGBP short trade at market price (0.8923)

The Weekly Update: NZD and the Consumer Price Index

As all trades are 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.
The Weekly Update: NZD and the Consumer Price Index

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The Weekly Update: NZD and the Consumer Price Index

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The Weekly Update: NZD and the Consumer Price Index