Twisted advice about the NZD

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. 

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