NZD/USD to 70 Cents?

NZD/USD to 70 Cents?

Chart Of The Day

NZD/USD to 70 Cents?

The most important event risk on the calendar is the Reserve Bank of New Zealand’s monetary policy announcement. Like the BoE and RBA, the RBNZ is expected to cut interest rates by 25bp and if New Zealand also adopts a neutral stance, NZD will rise because 2% is still one of the most generous yields out there. However if they buck the trend and continue to maintain a strongly worded dovish stance, the currency could sink below 71 cents versus the U.S. dollar. While the RBNZ rate decision is singlehandedly the most important driver of NZD next week, the market’s appetite for U.S. dollars is also important. Friday’s unambiguously strong non-farm payrolls report sent the U.S. dollar soaring against all of the major currencies. Fed Fund futures went from pricing in a 57% chance of a 2016 rate hike yesterday to a 71.6% chance today. With 255K jobs added in the month of July and average hourly earnings growing by 0.3%, the U.S. economy shines compared to its peers. While we are still skeptical of the Fed’s commitment to raising interest rates this year, each piece of positive data will only harden the calls of the hawks who have already been saying that September is a live meeting and rates could rise this year. We highly doubt that a rate hike will come next month but the FOMC statement could be more optimistic, helping the dollar sustain its gains against all of the major currencies.

Technically, the recent rally in NZD/USD has failed below the 38.2% Fibonacci retracement of the 2014 to 2015 sell-off. This Fib level and the August high of 0.7256 are the 2 most important near term resistance levels for the pair. As long as NZD/USD holds below these levels, the path of least resistance is lower. Right now, the pair is finding support above the 20-day SMA and once that breaks the 50-day SMA and July 6 low of 0.7080 will serve as the next level of support. Beyond that, 70 is the target.

AUD/USD Targeting 70 Cents

AUD/USD Targeting 70 Cents

Chart Of The Day

AUD/USD Targeting 70 Cents

The Australian dollar continued to remain weak after Reserve Bank of Australia’s board member Edwards sent the currency tumbling overnight when he described the currency as “a bit too high” and said he would be “more comfortable with a level around 65 U.S. cents.” While he’s not the Governor or Assistant Governor of the central bank, the fact that AUD/USD is trading 6 cents above a level that most Australian policymakers would like to see gives us stronger reasons to be bearish Aussie. We continue to look for a move back down to 70 cents and that could be driven by the speeches scheduled for RBA Assistant Governor Debelle and head of payments policy Richards next week.

Technically AUD/USD is trapped between 2 important support and resistance levels. Above at 72 cents we have the 61.8 Fibonnaci retracement of the 10 year rally between 2001 and 2011. Below is the 50 day SMA and an important support level that limited losses in October, December and February. AUD/USD broke below that level on Friday and if it falls to new lows, 70 cents will be the next stop for the pair.

Will AUD/USD Hold 70 Cents?

Will AUD/USD Hold 70 Cents?

Chart Of The Day

Will AUD/USD Hold 70 Cents?

The Australian dollar experienced its strongest one-day decline versus the U.S. dollar in a month and this month is exceptionally painful for our long AUD/USD trade. Considering that there were no Australian economic reports released today and the decline in gold prices was relatively mild, U.S. dollar strength was the primary driver of AUD/USD flows. While U.S. dollar strength can be a powerful catalyst at the end of the day Australia still offers a higher yield than the U.S and for the next 2 months the focus should shift away from a Fed hike which should help AUD/USD recover. A year end Santa Claus rally could also bolster risk appetite helping to lend support to AUD.

The technical picture for AUD/USD is less encouraging. For the first time in 3 weeks, AUD/USD closed firmly below its 100-day SMA. Thankfully there’s plenty of support below current levels including the Oct 29 and Nov 18th lows near 0.7068 and the November low right above 70 cents. Resistance is back at the moving average.

BK EUR/GBP Out for +40

Swing

Out of EUR/GBP +40 on trade

BK – Close 1/2 EUR/GBP at 0.7226 for +40, move stop on rest to our average entry price of 0.7266

EURGBP Second Entry Triggered. Now short 2 lots with average price of 0.7266

BK EUR/GBP Big Trade – Aiming for Another Test of 70 Cents

The Trade:

SELL EURGBP

Place Order to Sell 1 Lot EUR/GBP at market (now 0.7203)

Pace Order to Sell 1 More Lot at 0.7328

Stop at 0.7460

Risk on our BIG TRADES is large, so make sure your position is small.

We will manage the take profit dynamically and send out alerts on when to take profit and/or move your stop.

—–

Revisiting Our Monetary Policy Divergence Trade

Since the beginning of the month we have largely seen the euro and British pound move in the same direction but the decline in the euro was far more aggressive, leading to sharp slide in EUR/GBP. However after the launch of Quantitative Easing, the selling in the euro began to ease and today, the euro is rallying while sterling is falling. The decline in the British pound reflects the market’s concerns about tomorrow’s Bank of England minutes and the possibility that it will reflect a less dovish central bank. While this may be the case, it won’t detract from the fact that the central bank will still be talking about raising interest rates and that <em>monetary policy in the U.K. will be drifting further away from the Eurozone in the coming months. The recent sell-off in the British pound was driven by BoE Governor Carney’s concerns about a strong currency but in the same speech he called for gentle rate rises, a view that has been echoed many times by fellow members of the central bank. Just as the prospect of Fed tightening has been extremely positive for U.S. dollars, when the BoE grows closer to raising rates, sterling will take off as well.

Right now we see a good opportunity to sell euros and buy pounds because the European Central Bank just started its Quantitative Easing program and they pledged to continue buying bonds for the next 18 months. The BoE will raise rates well before September 2016. The latest rebound in EUR/GBP provides an attractive level to start scaling into a short position particularly since there is a chance that the BoE minutes could be less dovish. Also, we are looking for an upside surprise in the labor market report after the PMI numbers showed strong job growth in the manufacturing and service sectors.

Technically we are looking for another move down to 70 cents. The 61.8% Fibonacci retracement of the 2000 to 2008 rally near 0.7260 is a key resistance level

EURGBP031715

The Trade:

SELL EURGBP


Place Order to Sell 1 Lot EUR/GBP at market (now 0.7203)

Pace Order to Sell 1 More Lot at 0.7328

Stop at 0.7460

Risk on our BIG TRADES is large, so make sure your position is small.

We will manage the take profit dynamically and send out alerts on when to take profit and/or move your stop.

Day Trading Signals March 27 – Trading Room VT Exotics +70 pips News +10 pips

News

BK NEWS TRADES with our Economic Data Projections   

Videos on How to Trade our 3 BK News Strategies 

How To Trade AJAX

How To Trade Crowd Fighter

How To Trade C – Trade 

BK Day Trading Chat Room Results 3/27/2015 +70 (Exotics)
AUD/CAD +25
NZD/JPY +25
NZD/CAD +10
AUD/JPY +10

EUR/USD +25
USD/JPY-150 (+0 if you did L3)
NZD/USD +11
 
Want to join our chat room (its included in your subscription)?

Just Email [email protected] with subject line “Slack”

   

****NOTE we are going to trade C-Trade and Crowdfighter on 15 Minute rather than 5 minute delay on all pairs today***

  

  

  No Trades 3/27

  

Date Currency
Event
GMT Strategy

 

  

Last 24 hours Results
Crowd Fighter 
No Trade

 
C-Trade
GBP/USD +10

 

  

CALENDAR CALLS

Here’s what we are looking for in tomorrow’s economic reports (March 27, 2015) – Good Luck Trading!

1. US Q4 GDP Revisions (8:30am NY Time) No Trade — Revisions are difficult to handicap but can be very market moving for the dollar 

Day Trading Signals March 19 -Today Gains in Chat +70 pips

News

BK NEWS TRADES with our Economic Data Projections   

Videos on How to Trade our 3 BK News Strategies 

How To Trade AJAX

How To Trade Crowd Fighter

How To Trade C – Trade 

BK Day Trading Chat Room Results 3/18/2015 +35

NZDJPY+10

EURUSD+25
GBPUSD+30
NZDUSD+5

Want to join us? email [email protected] with subject line “Slack”

  

All BK NEWS Signals are sent out instantly via our smartphone App by SNAPP Trader
 

  

  

  ****NOTE we are going to trade C-Trade and Crowdfighter on 15 Minute rather than 5 minute delay on all pairs today***

  

No Trades 3/19

  

  

Date Currency
Event
GMT Strategy

 

  

Last 24 hours Results
Crowd Fighter 
No trade 

 
C-Trade
USD/JPY +10

 

  

CALENDAR CALLS

Here’s what we are looking for in tomorrow’s economic reports (March 19, 2015) – Good Luck Trading!

1. NZD Q4 GDP (5:45pm NY Time) Bullish NZD — Potential upside surprise given stronger trade and retail sales activity

2. SNB Rate Decision (4:30am NY Time) No Trade – Could be very market moving but rate decisions are hard to predict

3. US Current Account Balance (8:30am NY Time) Bearish USD – Potential downside surprise given weaker trade activity

4. US Philadelphia Fed Index (10am NY Time) Bearish USD – Potential downside surprise given weaker Empire State manufacturing index 

EUR/GBP – No Support Until 70 Cents

EUR/GBP – No Support Until 70 Cents

Chart Of The Day

Five days have past without a rally in EUR/GBP and further losses are likely. The European Central Bank just started buying bonds today as part of its EUR 1.1 trillion program to stimulate the Eurozone economy at a time when the Bank of England is preparing to raise interest rates. This week we will hear from a number of U.K. policymakers including Bank of England Governor Carney, MPC members Fisher, McCafferty, Weale, Shafik and Haldane. Most of these members of the central bank believe that rates will need to rise and their views should have been hardened by last week’s economic reports. As we indicated on Friday, sterling had previously weakened on the belief that the Federal Reserve will raise interest rates before the Bank of England. While we agree with this wholeheartedly, the BoE should not be far behind and this view should lead to a further decline in EUR/GBP.

We have to turn to the monthly chart of EUR/GBP to find key levels since there is no major support until 70 cents. As for resistance, the currency pair just broke below the 61.8% Fibonacci retracement of the 2000 to 2008 rally at 0.7260. This former support is now resistance and its importance is reinforced by the fact that the currency pair also topped out at this level back in 2003.

EURGBP030915

AUD/USD 01.12.14 +70

Swing

January 12, 2014

Buy Order for AUD/USD TRIGGERED

Place Order to Buy AUD/USD @ 0.9027

Stop @ 0.8967

Close ½ @ 0.9057, move stop to breakeven

Close rest @ 0.9175

While there has been a lot of weak Australian data, the currency pair is very vulnerable to a short squeeze because of the extreme level of short positioning. There are many stops sitting above the key 90 cent level and we believe that if this level is broken, the pair will squeeze quickly higher to 91 cents. When Asian traders return their desks on Sunday and see how weak the NFP report is, they could drive the U.S. dollar even lower and AUD/USD above 90 cents. Gold has also been performing well, lending support to the pair. As we expect the USD to continue to weaken, gold should extend higher.

January 13, 2014

BKSWING Long AUD/USD Target 1 reached at 9057+30 move stop to be at 9027

BKSWING Move stop to 9067 to lock in +70 on AUDUSD