Ahead of RBNZ’s rate decision tonight? I’m long. You?
and that’s the wise thing to do as long as price stays above 0.865
Risky decision. Never trade news. You don’t know what is going to happen
I wasn’t in a kiwi pair going into the decision. I jumped into the selling party after the fact for a quick 33 pips. I have taken half my position off. My question is where do we think it will go from here. I usually have on opinion especially on the kiwi, however at this point I really have no idea. I probably wouldn’t be in the trade if I didn’t have profit locked in. Looking forward to hearing some opinions.
Simples:
when you price in perfection, that is, when a central bank does exactly what it told the markets it would do
months in advance, and even when this should be a good thing for the currency, that is, a rate hike, the
mere hint of a divergence from that path (in this case, that the next meeting of the RBNZ may not lead
to a hike) is enough to get the bears excited and send that currency tumbling…
These are forward-looking markets, so even though the RBNZ DID HIKE this time, the fact that it MAY NOT
do so the next time was the cause for a sell-off…
However, saying this with the wisdom of hindsight is smarter than trying to trade the event, with the
potential of trying to wrong-foot the market with the sort of bias that the market can easily ignore:
by logic, a rate hike from the MOST BULLISH of all the central banks from the Majors’ circle, SHOULD
have boosted the NZD… Guess what: it didn’t… Anyone trading by this logic could have made a loss…
As PerryFX said above, you just do NOT KNOW what is going to happen during a news release…
Here is a brief article on the matter:
So after catching up on the data and doing a little research, I think the NZD/USD will probably come down. I think I am going to sell again @.8650 if I get a chance, with a stop above .8700 and a target just above .8400 down around the 200 MVA.
Msteele
if you have not already looked at NZD/JPY,
you can also see if it has better potential to the downside than NZD/USD…
Here is an article I wrote not long ago on this pair:
Good luck…
PS: in the past week or so, this pair (Kiwi-Dollar) has fallen by more than 250 pips…
on the back of the most hawkish central bank (the RBNZ) providing rate hikes.
We live in a crazy world…
So the question is: if you have not joined in with the selling party, do you join in now?
Do you wait for a bounce up and THEN sell at the next move down?
The choice is YOURS.
Happy Trading.
Indeed I took a look at your article, looks like you have been spot on so far well done. I personally don’t trade yen pairs much anymore, but you have me thinking now. So if we have a RBNZ that is no longer hiking, a BOJ that is no longer easing, and we get an unwind of yen shorts. 44.00 still seems pretty bold to me do you have a time frame in mind? I would think about a year before 44.00 and beyond. Now 70.00 I can see, but I am really not thinking that far into the future, I am going to stick w NZD/USD short in the near term. Yen pairs seem pretty range bound right now.