It doesn't take much brains to figure out why the NZD tanked against the USD after the ISM data.
Seems there are still dozens born every minute because many so called "experts" in forex have been exhorting people to go long NZD for a week now and many did in fact go long.
So here they are stop hunting, hoping to make money off the gullible traders.
Given the high interest rate, I might choose to go long just about now at the .82965 level.
Somehow I have this feeling that the USD is about to pull a surprise.
But that's just me. I trade price action and I don't make any claims about being an expert. Not by a long shot.
All the advice I can give is simply this. Think carefully before pursuing the experts advice.
Tuesday, September 2, 2014
Tuesday, August 19, 2014
Curious NZD behavior
The Global Dairy Trade event today showed a -0.6% decrease in milk prices.
While this was expected to (once again!) hit the NZD, the curious thing is that it did weaken, then it rapidly moved back up, even surpassing the levels prior to data release.
I believe the explanation for this is the fact that many who follow the NZD milk trade know that the price of dairy is naturally hedged and if historical data is any indication, in comparison to prices this time last year, the prices are relatively better. Those who trade NZD seriously are without a doubt, aware of this fact.
Hence, the logical conclusion is that the rapid movement just a few minutes ago is merely the attempt by some well funded traders to profit on the initial volatility that precedes and accompanies data release.
Anyway, those who wish to learn more about this milk price hedge can read about here
While this was expected to (once again!) hit the NZD, the curious thing is that it did weaken, then it rapidly moved back up, even surpassing the levels prior to data release.
I believe the explanation for this is the fact that many who follow the NZD milk trade know that the price of dairy is naturally hedged and if historical data is any indication, in comparison to prices this time last year, the prices are relatively better. Those who trade NZD seriously are without a doubt, aware of this fact.
Hence, the logical conclusion is that the rapid movement just a few minutes ago is merely the attempt by some well funded traders to profit on the initial volatility that precedes and accompanies data release.
Anyway, those who wish to learn more about this milk price hedge can read about here
Saturday, August 16, 2014
George Soros betting on stock market crash
It is a bit of news that those in the know are dreading.
After what happened to the Bank of England after Soros made his move before, traders tend to watch out for what he will do next.
Well before the markets closed last week, August 15, 2014, Soros made his move, putting $2 billion on a move that anticipates a stock market crash.
Scary news indeed, read about it here
Let's be careful out there.
After what happened to the Bank of England after Soros made his move before, traders tend to watch out for what he will do next.
Well before the markets closed last week, August 15, 2014, Soros made his move, putting $2 billion on a move that anticipates a stock market crash.
Scary news indeed, read about it here
Let's be careful out there.
Tuesday, July 29, 2014
Going long NZD
Fonterra dropped milk prices today to their lowest levels in several years. As expected, this induced a drop in the NZD.
Personally I find these levels über attractive and could form a basis for a lucrative carry trade.
Friday, July 25, 2014
Itching to go long
I still have several Aussie longs that haven't turned into profit yet, but I didn't mind before because it was earning interest anyway.
So I was pretty much fine with it until a couple of days ago when the RBNZ or Reserve Bank of New Zealand added an anticipated 25 basis points making the NZD almost 30% more profitable as far as interest is concerned. Moreover, as per my post the other day, the NZD is actually dropping (go figure) so its in what appears to be a nice level to go long
Consequently, since then, I have been itching to go long on the NZD and every time I see a bullish candle on the charts I worry that it might bounce already. Nothing I can do though except to wait with my finger on the trigger with only 3 1/2 hours to market close.
So I was pretty much fine with it until a couple of days ago when the RBNZ or Reserve Bank of New Zealand added an anticipated 25 basis points making the NZD almost 30% more profitable as far as interest is concerned. Moreover, as per my post the other day, the NZD is actually dropping (go figure) so its in what appears to be a nice level to go long
Consequently, since then, I have been itching to go long on the NZD and every time I see a bullish candle on the charts I worry that it might bounce already. Nothing I can do though except to wait with my finger on the trigger with only 3 1/2 hours to market close.
Thursday, July 24, 2014
Strange NZD behavior
The RBNZ came out with a decision to raise the NZD cash rate by 25 points to 3.5 from 3.25.
This decision was largely expected though normally, even in this case, the currency tends to rise substantially.
Strangely enough, the NZD not only refused to rise, but even went down substantially.
Explanations of several forex columnists revolved around the statement of an RBNZ governor that this would be the last raise for some time. While this statement is a bit of a let down, this point of view ignores the fact that the NZDD has the highest cash rate at the moment.
The AUD has a rate of 2.5 right now so the NZD has a significantly higher rate. Sure its a far cry from the 7% in 2008 for the AUD, but 3.5 for the NZD is certainly nothing to sneeze at.
Anyway regardless of this curious behavior, I am happily trying to go long on the NZD right now in an effort to use it as a replacement / supplement for my AUD in so far as my carry trades are concerned.
This decision was largely expected though normally, even in this case, the currency tends to rise substantially.
Strangely enough, the NZD not only refused to rise, but even went down substantially.
Explanations of several forex columnists revolved around the statement of an RBNZ governor that this would be the last raise for some time. While this statement is a bit of a let down, this point of view ignores the fact that the NZDD has the highest cash rate at the moment.
The AUD has a rate of 2.5 right now so the NZD has a significantly higher rate. Sure its a far cry from the 7% in 2008 for the AUD, but 3.5 for the NZD is certainly nothing to sneeze at.
Anyway regardless of this curious behavior, I am happily trying to go long on the NZD right now in an effort to use it as a replacement / supplement for my AUD in so far as my carry trades are concerned.
Monday, July 21, 2014
A Brave New World
Its been quite a long while since my last post. Many things have happened both in the FX world and in mine so there wasn't that much time to post.
I haven't stopped trading though and because of my disgust at the brazen market manipulation, I resorted to scalping. This was a decision that proved to be a wise one because the market has been quite volatile.
Thankfully, there was a bit of a crackdown on market manipulators which can be seen in the smaller swings in currencies.
However, evidence still points to manipulators particularly when economic data is expected. Good data has sent a currency plunging which simply shows that a new strategy of trading forex is needed if one is to survive.
As the post title says, its a brave new world of trading and in truth, it is, now more than ever, something that only the brave should do.
I haven't stopped trading though and because of my disgust at the brazen market manipulation, I resorted to scalping. This was a decision that proved to be a wise one because the market has been quite volatile.
Thankfully, there was a bit of a crackdown on market manipulators which can be seen in the smaller swings in currencies.
However, evidence still points to manipulators particularly when economic data is expected. Good data has sent a currency plunging which simply shows that a new strategy of trading forex is needed if one is to survive.
As the post title says, its a brave new world of trading and in truth, it is, now more than ever, something that only the brave should do.
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