Bearish on New Zealand dollar

[Investor123]

The Reserve Bank of New Zealand cut interest rates for the first time in 5 years on 24 July 08. Reserve Bank of New Zealand reported that economic activity is likely to remain weak over the remainder of 2008.

Retail sales had fallen by the most in 4 years and consumer confidence hitting record lows, the New Zealand dollar has weakened to the lowest level in 6 months.

RBNZ Governor Bollard promising more rate cuts and the futures curve pricing such action, the New Zealand central bank has become the most aggressively dovish policy maker of the G10.

Further weakness is expected in NZD and for it to fall below 66 cents against the US dollar before end of September.

NZDUSD tends to fall when daily stochastic shows oversold.

 

[Investor123]

NZDUSD chart:

 

[Investor123]

The Reserve Bank of New Zealand cut interest rates for the first time in 5 years on 24 July 08. Reserve Bank of New Zealand reported that economic activity is likely to remain weak over the remainder of 2008.

Retail sales had fallen by the most in 4 years and consumer confidence hitting record lows, the New Zealand dollar has weakened to the lowest level in 6 months.

RBNZ Governor Bollard promising more rate cuts and the futures curve pricing such action, the New Zealand central bank has become the most aggressively dovish policy maker of the G10.

Further weakness is expected in NZD and for it to fall below 67 cents against the US dollar before end of September.

My proprietory trading system had signal SELL for NZDUSD

Shorted 10,000 NZDUSD at 0.6962
Stop level at 0.7080
Target level at 0.6766

 

[Investor123]

Currently NZDUSD is trading at 0.6932, 30 pips profits.

 

[Investor123]

Yesterday I had shorted 10,000 NZDUSD at 0.6962, stop level at 0.7080, target level at 0.6766.

Today Australia central bank had cut its interest rate by a quarter point to 7%, causing AUDUSD to plunge down, and dragged NZDUSD down as well.

Currently NZDUSD is trading at 0.6842, profit is up 138 pips, US$137.60.

I believe US dollar strength will continue until Australia, New Zealand, Europe and UK are done with their interest rate cut, which will take another 6 months at least in my view.

Hence I think its not too difficult to make money in the forex market by shorting EURUSD, AUDUSD, NZDUSD and GBPUSD during this period.

My trading system is still signal SELL for NZDUSD.

 

[Investor123]

NZDUSD fell to a low of 0.6805 before rebounding up. I believe the overall trend for NZDUSD is still down, but it is oversold now, so we may see a rebound.

I decided to take profit first, bought back at 0.6871, profit is 91 pips, US$90.60.

 

[Kauri]

My kaleidescope gave a sell on the Kiwi... and seeing as it can't fly.. hey Investor123.. where are you?/

In an effort to stem the mass intraday migration from money markets the NY Fed has just announced it stands ready to conduct operations later in the day if such an action is required.

Cheers
............Kauri