NZD - A disaster waiting to happen - Page 3
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Thread: NZD - A disaster waiting to happen

  1. #21
    Quote Originally Posted by ;
    This is a monthly chart of this NZD/USD....some food for thought?
    WOW, so interesting... I want to begin trading this pair but still didn't look at it deeper... However, this charts informs everything.

    Breach of 1997 large, 2nd drive to 7480... I will watch for violation of 7500 to get an explosion upward. In the meant time USD-index attempted 81.50 (2005 non ) twice and failed. 1 next push is Very Likely to decode it, bringing additional USD bears into the fields

    7500 breached USD-index below 81.50 afterward a kiwi long is a commerce overlook, imo

  2. #22
    A friend of mine has 1.5 mio. USD non-speculative money in the bank. For a higher interest return purpose, he changed it months ago into NZD. Of course he luckily also chosen the NZDUSD rally.

    Now that NZDUSD MAY have a opportunity to correct downward, can he come to the forex market and short 15 lots on NZDUSD to hedge his bank savings in NZD? The interest return will be deducted somewhat, but overall he will be safe for any capital changes, right?

    Would Love to hear any comments about this.

  3. #23
    Quote Originally Posted by ;
    A buddy of mine has 1.5 mio. USD non-speculative money in the bank. For a higher interest return purpose, he changed it months back into NZD. Of course he luckily also chosen the NZDUSD rally.

    Now that NZDUSD MAY have a chance to correct down, can he come to the FX market and brief 15 lots on NZDUSD to hedge his bank savings in NZD? The interest return will be deducted a bit, but overall he is going to be secure for any capital changes, right?

    Would Love to hear any comments on this.
    You can hedge any place with the forward market...

  4. #24
    We have to also realize NZDJPY is your main reason behind the appreciation of the NZD currency in general. My proof would be to look at USDCHF from March 6 to show. Basically range traded. This means USD itself did not shed much vs other currencies. The move is mainly as a result of JPY weakness for the previous 6 weeks. Carry trades came back in full force the second week of March. This might be due to Japanese repatriation of profits for their year end books, or it might be due to the aftermath of the Chinese stock market crash that everybody is very nervous about. Either way both these things surfaced and surfaced the carry trade market for two weeks then came back just as strong. We are just 400 pips greater on NZDJPY right now vs ahead of the Chinese stock market crash 6 months ago that sent people running for the exits.

    Likewise the GBP has appreciated greatly because of GBPJPY carry traders.

  5. #25
    I'm not a CTA however but he can hedge with puts or market NZD futures. Futures price in interest rates at their prices. That's why we can't go to stocks and market NZDJPY and go to forex and buy NZDJPY. At the close of the day we would be web 0 down some due to forex massive spreads. Futures have quite tight spreads unless you are at a inadequate broker such as Inf**ity or similar. I have never traded futures. I have only heard from CTA's and Vegas their liquidity is far worse than forex. Not having a central clearing loion for many transactions is a boon in disguise for us. We can occasionally trade unreal prices during highly volatile markets. The very best way to trade forex in my speculation through highly volatile instances would be to watch a futures chart (which costs money to find out because the feed itself costs as it's one central feed) then trade forex onto a sluggish retail broker such as Oanda or some other MT4 broker. You will eventually be shut down but at the mean time you will easily make a killing. Anyone want to do so?
    Sorry for the rant. I'm bored.
    PM me if anyone thinks this could be fun. I just opened a retail account vs my other two institutional accounts cause I want the imitation market.

  6. #26
    Quote Originally Posted by ;
    this is what Vegas needed to mention in one of his websites about carry trading. The day it unwinds, it is going to be hell for some and lots of cash for others.

    This pair was in buy mode since May 17th, and there's been no thrust at or outside the first fib
    We traded after on the fall into the first fib, almost got stopped out, and then sold on the rally back for a
    very small loss.
    However, storm warnings are brewing in this pair which makes it incredibly hazardous to be long on breaks.
    I told you before, major news trumps all technicals, and on this subject we definitely have some major
    news. For the first time I can recall in a cross, politicians are getting in to act. This past week, all hell
    broke loose if some Finance minister in Europe talked about the EUR/JPY along with also the demand for this particular
    cross to quit appreciating because it was damaging European exports. He hinted that it will be a subject for
    discussion at the forthcoming G-7 summit in Singapore on September 15 -- 20th.
    Nowthe issue here is the fact the entire world is long EUR/JPY, and for that matter brief the
    Yen in all the crosses. Yen was the”funding vehicle” for all the carry trades throughout the previous few
    years. Past history suggests when this carry trade falls out of favor with the hedge fund community it
    is going to be NASTY. I mean REAL NASTY. Account end horrible. Moves that make you believe that your
    system is broken and can't possibly be appropriate. I am speaking of anywhere from 500 to 2,000 pips in a
    few days. Moves that kill speculators and make each politician happy at the idea. The last
    suggests this is going to be the outcome.
    You will find TRILLIONS of dollars worth of those trades on, and when this political talk that began last
    week starts to gain traction with other politico's in Japan and elsewhere, seem out below. I can
    assure you, right now, there are lots of hedge fund managers who are very nervous about this pair
    and their long positions. When [ not if ] these men hit the exit at precisely the same time it can get REAL
    interesting. Your market stop, in a situation like this, is moot. With a long position, you could very
    readily get stuffed 700 pips from your stop [ or worse ].
    Let's be clear.
    I don't know when it'll happen -- I just know it will happen. All the dominoes are being put up. The
    politico's are starting to ship the”between the lines” message into the investment community. Right now,
    everybody would like to play nice. But, the cannonball was”shot across the bow”. It is just an issue of
    So, though we don't have a reversal top above the fib extreme, I am shifting to market mode within this

    Everybody understands it is going to happen; I noticed soros speak of it not long ago. This is going to be a memorable story that is likely to be researched in universities accross the world for quite a while after conveys unwind.
    I totally concur with this analysis... in short term, trend can go contrary to fundamental, however in medium and long term, no way...

  7. #27
    Well considered analysis, Kzazs. Thanks.

  8. #28
    Thanks everyone for their input. It's nice that we have a discussion going, but if I do not incorporate my theory to trading then it defeats the purpose of having a discussion.

    My strategy for wednesday April 25, 2007 is as follows:

    I will short NZD/USD in 4:45 p.m EST.. My stop loss will be 100 pips my first target is 0.71 afterward my next target will be 0.69. This gives me Profit loss ratio of about 3.5:1, believing the price would be around .7450. Higher the better.

    There's 60%-70% likelihood of rate hike to 7.75percent on April 25. In the event they dont increase possess a bullish stance then NZD may grow initially accompanied by a fall, or it may fall in the beginning, as individuals who have been long for quite a very long time need to bond.

    In case of a rate hike, there could be an upward surge, setting up a bull trap followed by a decent autumn within 24 hrs towards my target, though it may take a day or two to reach my target. In the event of unexpected response I'll be ready to take a 100 pip reduction, waiting for another chance to short.


  9. #29
    Quote Originally Posted by ;
    I will short NZD/USD in 4:45 p.m EST.. My stop loss will be 100 pips my initial target is 0.71 then my second target will be 0.69. This gives me Profit loss ratio of approximately 3.5:1, believing that the price would be approximately .7450. Higher the better.
    In the event of unexpected response I will be ready to bring a 100 pip loss
    Nice and sensible plan. Just want to suggest that for your stop loss order, you should consider to use'stop if bid' to protect yourself from becoming miskicked. This can be a lesson cost me thousands of dollars.

    Let's see what will happen then.


  10. #30
    94890I have my plans laid out for NZD for wednesday April, 2007. Check out my previous post in this thread. In the meantime we have two very important news coming out of Australia. PPI CPI.

    Australian economy is bigger than NZ commodities, gold, occupation, natural occasions e.g. drought etc strongly influence the AUD. Australia is still recovering from the effects of drought it's suffered. Their wheat output is down, but the labor housing market was strong, together with gold commodoties. The inflation is greater the AUD has shrunk based on gold commodities (China is the major consumer, USA is another) prices. As growth in US slows these prices are bound to return.

    RBA held on the rates in the last meeting since they were waiting for CPI results being published on Monday April 23rd April, 2007. Above then prediction PPI CPI figures on Sunday Monday will definately make a rate increase by RBA ( 1st week of May a done deal). As AUD is overbought overpriced the move up of the AUD will be restricted. Bad risk to benefit ratio from this stage onwards, therefore I am going to stay out. I am not going to buy AUD on PPI CPI figures that are higher. In case of figures I will wait for the market to price in the rate hike will short after the statement of rate increase in May 2007. More in my posts on it.

    There is a really good risk to reward setup if PPI CPI figures are under prediction. PPI is expected to be.5% greater CPI.6% higher. A figure of.3% or less will result in a market rally in AUD, as RBA can stay on hold for a few weeks. My plan is as follows:

    I will short AUD/USD at about 9.20 p.m EST on Sunday April 22, 2007, using a stop loss of 100 pips.I expect the price to maintain .8350 into .8390 range. In case PPI figures come out lower than expected afterward AUD will pull back. In case on Monday April 23, 2007, if I am up 50 pips I will bring my stop to break even before CPI release. If up less than 50 pips I will probably stick to my original stop. When the CPI is below expected levels, then the chances of rate increase evaporate AUD falls big moment. My target is .8000. Profit to loss ratio of 3.5 to 1.

    If I break even before CPI launch my stop loss is hit. Then I will reenter following the launch of CPI figures if they are under.4 to.3 percent.

    Next 3 days fairly interesting, isn't it.


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