The Weekly Update: We Are Pressing on with NZD

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Gold Selling and the Fed

We are currently holding 2 open trades in EURUSD and NZDUSD, both are in a decent profit at the time of this writing. We have already shifted the protective stop above the entry in NZDUSD while EURUSD stop is currently at the entry. We have realized partials of both trades as we prepare for the upcoming week where the main economic event is the Fed monetary policy meeting on Wednesday. The reason why the FOMC statement may receive a greater attention is due to the fact the market is anticipating the Fed to raise rates in September. Should the Fed hint any rates hike may be pushed to the end of the year heavy USD selling will occur in the Forex market, which may serve our long trade in EURUSD.

To recap the key events that took place last week, moderate selling was noted in XAU/USD (gold) in the commodities market. It appears most of the selling originated from GLD fund, which dragged the Australian Dollar (AUD) lower against a basket of currencies in the Forex market. We believe the fundamental trigger for the mass selling in XAU/USD was the market pricing-in the possibility of an in-bailout by Greece, which may force the Greek central bank to liquidate its gold reserves as we have seen in Cyprus several years ago.

Standard & Poor’s (S&P) warned it may cut Australian credit rating should the country’s budget fail to improve,  fueling AUD selling pressure in the market. We have analyzed AUD pairs and crosses and it appears we require further selling in the Australian Dollar in order to consider a long entry. Gold may have provided a technical entry but with a protective stop that exceeds $30 means a hefty market exposure, which we are currently refusing to consider.

NZDJPY Technical Analysis

After analyzing the market we have spotted an attractive entry in NZDJPY.

NZDJPY Weekly Chart

Please click on the chart to enlarge:

NZDJPY Trading Strategy, 26 July 2015

NZDJPY Weekly Chart 26/07/15

We should highlight that we also have a technical entry in NZDCHF but the Kiwi-yen Risk Ratio (RR) suits our risk management techniques. Following the breakout of the support line that originated in July 2013 moderate losses were seen in NZDJPY. The reversal pattern that was affirmed at the weekly close is slightly above the latter support at 80.25 although we we view last week’s session as a successful re-test of 80.25. The target for the anticipated gains is at the next meaningful resistance at 84.85.

At the Reserve Bank of New Zealand (RBNZ) monetary policy meeting the central bank removed the warning of a strong currency (NZD), which lifted the Kiwi against a basket of currencies despite the 25bps rate cut that was largely anticipated by most traders as we have updated in our prior weekly update. There is a fair possibility now that the warning has been removed NZD may continue to strengthen as the threat of a FX intervention by the RBNZ has been eliminated (for the time being).

As you may have noticed the required stop must be below 80.25, preferably at 79.58 as we highlighted on the chart. A bearish gap in NZDJPY may enhance the risk ratio of the long trade and substantially reduce the protective stop loss order. We will issue the trade alert details via an email when the Forex market opens at 21:00 GMT.

NZDJPY Trade Alert Details

Please click on the chart to enlarge:

NZDJPY Weekly Chart II 26/07/15

NZDJPY Weekly Chart II 26/07/15

Entry: Market price (81.27)
Take profit: 84.85
Protective stop: 79.67
Risk Ratio (RR):  1 : 2.3 (approx.)
Estimated duration: 21 days

We are also monitoring in GBP and AUD currency pairs and crosses but no entry is available at the time of this writing. Should the market provide us with a technical entry the strategy will be released in the Forex Trade Alerts section and you will be notified via an email. Bank of England (BOE) officials stated over the weekend that there is no hurry to hike rates, which may have a negative impact on GBP when the market opens from the weekend break.

28/07/15 UPDATE: NZDJPY is trading at 82.45 at the time of this writing. We are closing 30% of the long trade at market price.

28/07/15 UPDATE II: NZDJPY is trading at 83.02 at the time of this writing.

Please click on the chart to enlarge:

NZDJPY Weekly Chart 28  July 2015

NZDJPY Weekly Chart 28 July 2015

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

30/07/15 UPDATE: NZDJPY is trading at 82.12 at the time of this writing, paring the earlier gains that were noted in the market. We are closing 10% of the long trade at market price.

31/07/15 UPDATE: Despite the gains that were recently noted in the Forex market NZDJPY triggered the protective stop loss order at the entry. We have liquidated most of the trade with a profit and enjoyed positive interest at the rollover.

The Weekly Update: We Are Pressing on with NZD

As NZDJPY trade is closed, this page can  now be accessed by all traders. Open trades are restricted to members only. We have been proving trade alerts in the Forex market since May 2014.
The Weekly Update: We Are Pressing on with NZD

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The Weekly Update: We Are Pressing on with NZD

                                         The Weekly Update: We Are Pressing on with NZD
The Weekly Update: We Are Pressing on with NZD
                                             The Weekly Update: We Are Pressing on with NZD

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