And on top of the algos have to remember that the order book for pairs like gbp/nzd isn’t going to be very deep. So vibrations in the main pairs elsewhere can have volatile reactions in these crosses. If trading these crosses it’s to be expected that market events that occur during a time when the market is already in a bit of a flap will occasionally result in some huge whips in price as the order books get reset and algos start doing their thing. A 200 pip candle in these pairs is the same as a 100 pip candle in E/U - it’s not all that common but it’s not a conspiracy or hackers either.
Agreed!! You said it right 
Hello traders! Ready for the new week?
What is on the calendar?
Not much, but one item stands out:
the Bank of England’s rate decision,
on Thursday (14th), 12pm GMT.
It may be a non-event, but worth looking
out for in case a shift may occur in the
MPC toward a rate change.
Just look at the volume…and, it is heading straight
into 0.65… Meanwhile, GBP/NZD is pushing up
around the 2.2250 level…
And China, those thieves, have yet to open. As Happy says, “buckle up baby”.
Don’t want to intrude, I am a demo trader now for 11 months…watching and learning. You gents appear to have been around the block a time or two, so I am going to tag along.
If you prefer a break from charts, check out Janet Devlin’s quest on Britain’s x factor, 2011. If she doesn’t melt your heart, I question your masculinity. No endorsement here, only personal opinion.
Back on topic, I would like to know how one treats a stop out, on a spike, do you consistently get back in right away, or do you give it time or pips to re-enter? I was tempted to kneejerk back in last Thursday’s drop, but did not. I wanted to see how it played out. From what the charts tell me, spikes eventually gravitate back close to original trading price. Correct me if I am wrong.
Na zdrowie,
Tim
Just tried something different…sold and only watched P/L and time for china open…actually got a 28 buck profit on 10,000 units. Gambling at it’s best.
Tim
Hello fellow Kiwi peeps!
The latest COT report (Non-Commercial, New Zealand Dollar) from last Friday night is available at
File Not Found | OANDA fxTrade Europe attached is the screenshot from the page:
Unlike May 2015, where overall long interest switched to short interest almost from one week to the nest,
this time it is a little more hesitant to do so, and actually slightly up-ticking on the long side last week: this
could be due to non-commercial speculators going long in the belief that NZD/USD has
finally bottomed and it would be a good opportunity to buy again… or, it could be that the report relates to
last Tuesday’s data, which means that on the second trading day of the year there is no clarity yet, although
open interest volume (that is, all positioning that has not been netted, and both long and short) is roughly
at the same level as the aforementioned period (May 2015), that is, around 25,000 (standard lots (100,000)).
I will await this Friday’s report to see how positioning continues to shape up through the first month of
the new trading year.
Happy Trading.
I am having an educated guess in saying that the
bar you point out was either the Tuesday before or
the one after the RBNZ rate decision (9th December)…
Yes, best play it safe and wait for price to either retrace
a spike’s wick or not… WHEN THERE IS A ‘BLACK SWAN’
however, there may be a huge double wick pointing
Up And Down, so ‘retracing’ becomes meaningless.
In the end: trading a spike (not by choice) means
finding a way out with very little bruising…
Gooooood morniiiiiiiing traders!!!
Weak UK data plunged GBP/NZD back toward 2.21…
Back to a key level at 2.20 now. Took a lot of effort to properly shove past this level recently. This should be where longs will look to make their first stand. Think I’m just going to sit and watch this one for now though to see if we get a deeper retracement after the 800 pip rise.
I agree with you, Tektolnes, and you have a good strategy there, if I may say so!
Yes, 2.20 has not been breached for a few days now, so it may be regaining strength… The ‘danger’ is not
over yet, for me, until we will see the pair solidly back above 2.30, after which I will start looking back to
higher targets with more confidence.
On the Kiwi side, there is nothing on the calendar; on the Pound side, there is this in fifteen minutes:
12.01.16 Mark Carney: Panellist at Banque de France Governor Noyer’s Farewell Symposium (14:15 GMT), Paris. No text to be released
As there will be no text, there will likely be no impact on Pound currency pairs…
On Thursday there will be the BoE rate decision, but I expect that there will be little or no change…
This leaves this pair more in the hands of dairy-influenced and risk-aversion moves on the Kiwi side,
although any move higher in GBP/NZD can be hampered should the Pound depreciate below 1.45
(a level that has been holding for a few days).
This is how I see the daily chart. The downtrend that started during September 2015 is still intact. The downtrend won’t be broken until price goes beyond 2.25 convincingly. A good support level is seen at 2.15. With the current price right in the middle of these 2 levels, it could go in either direction.
You have a good point there, Yohec.
This shows just how a chart can be viewed in more than one way, each of which can be correct in their
own way…
They’re meeting tomorrow (they’ve changed the schedules for 2016 but I’m almost certain that it is tomorrow) - anyways, imagine that Carney had been hinting about rises some time back, the economy was on the up, the smell of roses in the air, the BOE even upgraded forecasts for growth.
So May 2015, Carney impersonating a goalie, defensively the growth expectation is lowered.
Bank of England says UK economy to grow by 2.5% in 2015 - BBC News
Now even though anticipating a Wayne Rooney shot at goal apparently Carney was “relaxed”, after all the pressures on prices would be “relatively short-lived”.
Fast Forward to November, and check out Robt Peston’s reference to the beef market.
Bank of England dampens prospects of early UK rate rise - BBC News
Then figure the mood right now, petrol and diesel now at £1.00 per litre etc etc.
So then figure the tone, hawk or dove.
Excellent post, Peterma…
Truly, as I always say in my analysis videos (ad nauseam), we saw it all before from Carney’s instalment (July 2013), where the ‘rate hike chat’ took Sterling to 1.72 and yet it had all evaporated by the summer of 2014… After such a front-running effort, the markets are no longer receptive to empty promises from Threadneedle Street…