2 New Big Trades in GBP/USD and NZD/CAD


Place Order to Buy 1 lot of GBP/USD at 1.5342

Place Order to Buy 1 more at 1.5152

Stop for ALL 1.4965


Place Order to Sell 1 lot NZD/CAD at 0.8960

Place Order to Sell 1 more at 0.9140

Stop for ALL at 0.9330

The most tempting currency to trade right now is EURO but with our Big Trades we never like a chase a move especially when there is no reasonable level for stops. So instead we look beyond the euro to 2 other opportunities -- GBP/USD and NZD/USD.

We like buying GBP/USD quite a bit after yesterday’s HOT retail sales number. This was the strongest month for spending in 2 years, setting a sound foundation for next week’s UK GDP report. Retail sales is the most important contributor to growth. While the dollar is bid today we believe it will trade lower ahead of and after FOMC. The uncertainty in Fed policy should lead to profit taking on long dollar trades and with zero chance of a rate hike, the FOMC statement will probably disappoint.

We also like selling NZD/CAD. China’s rate cut should be positive for commodity currencies but the impact has been limited. The RBNZ meets next week and they won’t be happy with the recent rise in NZD. In the past month, NZD/USD has risen from a low of 0.6250 to 69 cents while AUD/NZD has fallen from a high of 1.1350 to a low of 1.0575. We may hear some optimism about the economy but the central bank could also express renewed concerns about the currency. There are no major economic reports from Canada so selling NZD vs. CAD is the ideal trade.


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