GBP/NZD moving slow today? Why?

Trading Discussion
565

GBP/NZD is the only pair I trade where I place a lot of weight on the fundamentals. All of the articles posted by PipMeHappy point to this pair going up significantly higher. In the latest article, Lloyds Bank forecasts 2.56 by year end. So I have decided to hold on to my positions as long as it takes to get back into good profit. It only needs to get to 2.4000 to put me at break even for all my positions.

But I don’t think I will be adding any more positions. It’s just a matter of waiting it out.

566

[B]Hello Yohec, and hello everyone!

I agree with you, Yohec, that is exactly my approach too… I really do have a very similar view, and it is very biased to the upside, like you, because of fundamentals…

The problem for me is now keeping the mental balance tipped toward what the market is telling us all, with this pair, as opposed to what my/your/our interpretation is of the market…

In other words, if the market decided that it wanted to resurrect the NZD/USD on technical grounds, in spite of fundamental bearishness; or, let us say, if it decided that GBP/NZD should no longer take its cue from NZD/USD (which has been stuck in the 0.63 - 0.64 range for ‘a few days’) but rather from a GBP/USD decline, as it has done this week; or, again, if it decided that it was not interested to make another 6,000-pip move (up to 3.00, from 2.40) as in the previous leg up; then, it will take any reason (crowd selling, market sentiment, etc.) and go for its own big move, regardless of logic, of fundamental reasoning, of all our good understanding and analyses of price and supply/demand principles…

That, indeed, is always the risk with playing the markets… [/B]

567

Well,

unless it is a BIG(!) suprise, I do not think that the markets will particularly take notice…

Gone are the days of NFP-glory… I think that NFPs have not shifted the Fed much anymore:

it seems that they would perhaps want more real-wage growth (they are not growing in the US,

on average), which means higher PCE (Personal Consumption Expenditure), and a sure way to

get people spending again and, finally, re-energising the (capitalist/Keynesian) economic cycle.

So I do not hold much hope for NFPs, or, indeed, much fear.

Hold steady, however, as you just ‘NEVER KNOW’!

568

Next ‘support’ level down seems to be the 100-day moving average, currently around 2.31.

569

Good morning , traders!

How are you all today?

It seems that, in the last trading week, the GBP/NZD’s correlation has shifted to GBP/USD:

with the NZD/USD stuck in a (roughly) 100-pip range (0.63 - 0.64, give or take a few pips

on either side), this does not explain the dramatic drop in GBP/NZD of 1,000 pips in one

trading week; looking at the GBP/USD chart, we notice that it has moved about 500 pips

down in the last trading week, which also explains dovish moves in other Pound pairs.

Looking at Oanda’s currency correlation map, the 1-day correlation of GBP/USD in relation

to GBP/NZD is now showing as strongly positive (red), which confirms this;


What is interesting is that crowd-positioning is strongly gathering on the Pound longs, as

I was reading from the DailyFX Chief Currency Strategist’s Twitter feed today:


While contrarian traders may take this crowd position as a cue to go short on the Pound

(and on GBP/NZD, for one), others may want to look for a dip/demand zone in Pound

pairs and get buying at cheaper levels; the trick is to choose the best Pound pair:

which one is less over-exposed?

GBP/JPY looks very overexposed, where GBP/USD looks like a better buy, for example;

however, with the Fed-hike tension still stirring the markets, GBP/USD may suffer should

the Fed hike by the end of 2015, unless the Bank of England were able to revive its own

rate-hike market support through its next meeting (8th October 2015), and through any

scheduled MPC or Governor speeches in the public domain to boost pro-Pound sentiment.

GBP/NZD has a lot of potential to the upside, at least in terms of relative positioning to

its former highs, and so it remains an issue of fine-tuning an entry; EUR/GBP benefits from

a dovish ECB outlook to provide what the Pound is now lacking in terms of direction, although

it too has been slugglishly glued around the 0.73 area for many weeks, lacking direction - not

an easy pair to trade, currently.

Take your pick, but beware that October, historically, does provide some surprises, so it may

be an anxious time for trend trading as traditional market conditions (with clear direction) may

give way to end-of-year profit-taking, leading to spikes through high volatility and draining liquidity.

Shorter-term trading may provide more opportunities in the last quarter of the year (starting today)

which may be lacking in longer-term, trend-driven trading.

Good luck,

and Happy Trading!

570

Its heading to next support fast :confused:

571

I agree at the moment the GBPNZD is reacting far more to the moves on the NZDUSD in addition the NZDUSD seems to be bouncing off the 14MA quite nicely on the 1hr chart

572

If it can break past the resistance level at 2.3700, it could shoot all the way to 2.4000 in a short time.

10_01_15_GBPNZD_H4.jpg700×696 48 KB

573

Just after I typed that it closed below the MA and started a move lower :slight_smile: (NZDUSD)

574

What Will The Fed Need to See From NFP to Hike? | BK Asset Management

Interesting comment on the GBP recently

Also just seen on Twitter

  1. #China does NOT want Fed hike.
  2. #CNY devaluation occurred the Monday after the last #NFP.
575

Well, if anyone could take a stab at explaining this pair today I’d much appreciate it. Solid news for GBP then terrible for USD (in my mind leaving GBP very strong with impending interest hikes looking close on timing and yet our pair ends the lower.
My cynical view of a squeeze left days ago, this has to be something more fundamentally based surely ?

Incidentally, last time we were close to these levels, the pair moved up over a thousand points on the Monday also the day after NFP

576

Okay, I will TRY, because I too struggled to understand how this pair would react to a BAD non-farm-payrolls
report…

Here is my theory (always easier, post-facto):

  1. USD pushed down by weak NFPs;

  2. GBP/USD pushed up and initially this extends to a GBP/NZD rise;

  3. NZD/USD also pushed up significantly;

  4. GBP/NZD is caught between its allegiances to NZD and GBP, the first one being its key driver until recently;

  5. GBP/NZD ignores NFP ‘traffic’ and eventually just makes up its own path by resuming current down-trend.

What this tells me, once again, is that when cross-fires (both a GBP/USD and a NZD/USD moving in the
same direction) catch GBP/NZD then there is very little that we can do to predict which way it is going to go…

Does this help?

577

It helps a lot, thanks Pipmehappy. I’ve not been a cross trader long and it looks like I will have to get used to these sort of moves. Not too often I hope though :slight_smile: Looking back at this pair’s history though, and it seems that the reaction can be a hell of a thrusting one when it comes. Which sadly I anticipated with the post nfp candle today, ooopsies

578

We are now getting very close to the 23.6 retracement of move up since early April (1.9305) at 2.3384 (Excluding the wick from the china move one month ago) this is also close to Monthly S1 at 2.33. (These, are my own figures on my charts so may differ slightly to media) For anyone who follows Dinapoli methods we are also close to forming a DRPO buy on the 4hr chart but needing confirmation of a close above the 7*5MA. The NZDUSD is at the top of the range, and coincidentally the GBPUSD is at the bottom of a range.
As always though, the market can stay irrational longer than I can stay solvent (John Maynard Keynes)

579

[B]Hello Traders!

As you can see on my GBP/NZD daily chart screenshot, the 100-day simple moving average

is just over 2.32, and price at the re-opening of the trading week tonight is just over 2.35:

with price so close to the 100-day moving average (as highlighted by the pink circle around the two),

we may be looking for a ‘bounce’ any time, and, conversely, we should wonder if price breaking below it

may signal the start of a bigger retracement; similarly, the blue-lined overlay, showing the mirroring

movement of NZD/USD, has moved back up to the top of a trend-line (marked by a blue line becoming

dotted), and the circled pink area has similar implications for GBP/NZD, meaning that it may show a

bounce and a downward turn, or a break through it and a retracement of Kiwi losses.
[/B]

GBPNZDCapture4Oct2015.jpg700×419 38.8 KB

[B]Whatever your take on the more recent ‘oversold Kiwi’ theme, we are certainly at a pivotal moment;

what we must now do is one of the hardest thing for people who are passionate about trading:

wait.
[/B]

:57:

580

Indeed, It looks like breakout or fakeout time

581

This is the last entry. Order filled overnight:

Position #8: Long at 2.3400

Now sit back and wait.

582

A quick question, do we have anyone selling this pair ?

583

Intraday Forex Charts Update – Oct. 5, 2015

Interesting read from Pippinainteasy

584

Good spot. Im not in this pair but still keep abreast