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Long or Short: long
Entry Point: .7950 and .8050
Stop Loss: .7750 and .7850
Profit Target/s: .8500 and .8750
Reward-to-risk Ratio: 5.5:2 (lower entry, 1st t/p level) to 7:2
Risk percentage: 0.5%
Indicators used:
-Stochastic (14, 3, 3)
-MACD (12, 26, 9)
-Tick volume
Trade Rationale:
-NZD proved resilient post-earthquake (1000 pips in 45 days, March to May)
-Positive economic news out of New Zealand
-Technicals from daily perspective appear to support a possible bullish trend
Trade Adjustments:
-Buy on both sides of .80. May even consider purchasing at higher levels if further information/patterns emerge and support the bullish case for NZD.
-Looking to trade this over the course of Late May through June (30-50 day term)
-Will abandon idea if events or technical trends emerge that send NZD back below .7750 or clear bullish trend does not emerge by 6/10/11.
Note:
This is a long-shot trade in my view. Though I think this currency pair has proven to have potential gains that could send it past .85, this would put the Kiwi in new territory. Still, there are a lot of fundamental reasons to support it, including higher interest rates (carry trade benefit?).