Balls Of Steel - trading volatile pairs

GbpNzd has been stuck in a bit of a range this past day or so. Currently trying to break above 2, 1760,. I think a consolidated break thru 2.18 could signal a strong surge as its pretty well clear water up to 2, 20

[B]CurrencyWatch feel Sterling has further to rise against Kiwi[/B]

"The New Zealand dollar (NZD) has been bucked by volatility over the past 48 hours - it suffered on Fonterra’s warning about the impact of a strong currency but then recovered after the government announced its budget was in surplus.

The GBP to NZD exchange rate fell from its perch just below the magic 2.20 level on the events.

The NZD did however weaken, and declines in GBP/NZD were arrested, after Finance Minister Bill English said he is in discussions with the RBNZ on new macro prudential tools that are likely aimed at the housing market.

The suggestion that the government will introduce fresh policy measures to counter the house price bubble will allow the Reserve Bank of New Zealand to finally get a grip on the country’s declining rates of inflation. Presumably they can now cut the main OCR rate at a more agressive pace.

This would slash the country’s yield advantage and therefore diminish demand for New Zealand dollars amongst international investors.
Uptrend Higher for GBP/NZD Intact

Despite the recent bout of NZ dollar strength, in the GBP/NZD pair, sterling remains the dominant force.

The June referendum on UK membership of the EU is likely to dominate all sterling pairs regardless of the other currency’s own fundamentals, unless they are equally important.

With no sign that it is reversing the current short-term up-trend is likely to extend even higher.

MACD is above the zero-line and therefore supportive. The pair has also shrugged off the positive trade-balance data in favour of the pound, which has risen to just shy of the 2.1775 highs.

A break above these would initiate the next step higher, with a probable target then at 2.1886 where the R2 monthly pivot - a line traders use to fade the dominant trend - is likely to stall the movement higher."

From Pound to New Zealand Dollar Forecast: Uptrend Still Intact

That article was music to my ears…

Thanks Eddie

After a day of price crawling slowly higher, it takes Yellen to push it over 2.18

YELLEN POINTS TO POSSIBLE SUMMER INTEREST RATE RISES – MARKET TALK
27 May 2016, 20:44
13:44 ET - Fed chief Janet Yellen has just pointed at strong prospects of a summer interest rate rise. If the economy performs as central bankers expect, when it comes to a rate hike, she says “probably in the coming months such a move would be appropriate.” Yellen didn’t get as specific as some colleagues who have pointed to either the June or July meetings, but even so, her comments show the Fed is clearly close to its next move. ([email protected])

(END) Dow Jones Newswires

Yellen will soar like a hawk!

I HOPE!!!

And I look forward to next week even more!

Have a great weekend, everyone!!

Pound to New Zealand Dollar: Outlook for the GBP/NZD in the Coming Week
Sunday, 29 May 2016 14:50 Written by Joaquin Monfort

The short-term trend in the GBP to NZD exchange rate is higher and our studies show there is little sign of the move abating in the week ahead.
The New Zealand dollar was the worst performing G10 currency in the week past.

“NZD comes bottom, dragged lower by a dwindling yield premium over the US - it’s down to 74bp at 10years, the lowest since July 2006. The market is split about the June RBNZ meeting, but does expect a further cut in rates this year,” says Kit Juckes, analyst at Societe Generale.

With regards to the outloook, the GBP/NZD charts are showing that a break above the 2.2003 highs would reassert the up-trend and probably lead to a continuation to 2.2150, just below the 200-day moving average (MA) at 2.2020.

GBPNZDMay27

The kiwi has recently lost ground after a warning from New Zealand’s national dairy cooperative, Fonterra, that the currency was too strong and was making it difficult for New Zealand dairy farmers to export their goods at competitive prices.

This heightened expectations the Reserve Bank of New Zealand (RBNZ) might cut interest rates in order to weaken the currency. Lower interest rates are overall negative for a currency as they attract less foreign capital due to the lower expected returns.

Reports the government and RBNZ might be about to introduce more macro-prudential policies to cool the overheating housing market, which has made Auckland the most expensive place in the world to live based on the ratio of average income to average house price.

The housing market has put pressure on the RBNZ to increase interest rates to reduce borrowing, however, if macro-prudential policies are introduced to tighten lending criteria, these will do the job of higher interest rates, freeing up the RBNZ to cut rates if it needs to.

Any more reports on housing policies in the week ahead, therefore, would be likely lead to the New Zealand dollar weakening further.

Analysis of the Pound
The main event for sterling will be the triumvirate of purchasing manager surveys (PMI’s) released, including Manufacturing, Services and Construction.

The fall below 50 in manufacturing PMI in the previous month of April was a particularly negative sign, which shows that the manufacturing sector is contracting (over 50 = expansion; under 50 = contraction).

If PMI’s for May continue to show weakness this will probably weigh on the pound because it will lower the possibility that the Bank of England (BOE) will raise interest rates sooner than expected.

Higher interest rates support a currency as they increase capital flows into the country due to the higher return offered.

Some analysts have argued that the fall in PMI’s is as a result of Brexit fears, which have contributed to a fall in direct foreign investment. If they are right then PMI’s should bounce back if the referendum vote returns a Stay win, as bookmakers still probably expect.

If PMI weakness is not due to Brexit concerns, however, then Economist Roger Bootle, argues it could substantially delay interest rate expectations, as PMI’s are currently at such a low level which, “in the past has often triggered interest rate cuts from the MPC.”

Pound to New Zealand Dollar: Outlook for the GBP/NZD in the Coming Week

Hi PipMeHappy, hope all is well with the bambino.
Just looking back in the charts, boring bank holiday Monday, and noticed GbpNzd hit 3.71 back in 2000. What’s the odds on getting back to that level, the stuff dreams are made of.
Best wishes with the baby, I envy you, those were the best times of my life.

Hi Eddie! Ciao! Bambina is so good, thanks! I cuddle her and she sleeps…I then navigate the charts with my spare hand haha Glad to hear you enjoyed your early fatherhood too, it is priceless :slight_smile:

Zombietown today with UK and US offline… GBP/NZD back to.3.70? Sure,why not?

Looking at a chart like the one I attach below (showing the last thirty-five years for this pair), anything is possible, as it is very difficult not to draw the conclusion that price moved in large cycles between 2.0 and 3.5+, with peaks in 1993 and 2000 (both times at 3.5+)… The seven-year cycle then continued as a downtrend with lower peaks in 2008 (3.0) and 2015 (2.5) …this suggests either a continuation of the trend to another lower high in 2022 (2.0) or a break above and return to former highs, anywhere between 2.5 and 3.5+ (again by 2022)…

My daughter will be six years old by then… :slight_smile:

May the Buddha bring the light of patience to our charts

:slight_smile:


Ps: chart prepared through FXtop.com

Sterling has taken a bit of a beating today, partly on thoughts that the recent rise may have gone too far, too fast. Not helped by Wm Hill bookmakers saying they’ve had a surge of bets on a Brexit.
However, I feel its gone too far the other way, so…

Long GbpAud @ 2.0153

It is an uncertain time for GBP and just as we get excited about a rally it comes to an end… ‘Buy vols’ at dips is the only tactical option, unless you are crazy like me haha

Pushing 2.02, almost 50 pips up already

GbpAud dropped, hit SL for +40 pips.
Now falling like a stone, will wait for any upturn before going again

Concluded my trading for May, my most consistent trading month since I went live.

46 wins
0 losses
47.5% account growth

Roll on June! :slight_smile:

You are

[B]The Pip King[/B] !!

nice! congratulations!

agree to Francis +1

Short NzdUsd 0.6761

Beet that in June! Super!!!

I’d keep an eye on the bookies as they usually have a good nose for these things but I’m always a little wary of betting as an indicator as many bets could be placed with risk & reward in mind. At least until fairly recently the remain bet wasn’t going to net you much. You’d get a much better return if the leave vote comes through so if you’re going to vote remain throwing a few quid on leave is probably a more interesting bet.

I was short GBP/NZD but closed out at 2.17 before all that stuff was released. Doh. Is there any info out there about when these polls are due to be released? They seem to be the primary driver for cable these days and I’ve no notion of what’s coming out and when.