The beginning of October saw the Australian Dollar bullishly rebound from the kiwi’s buying spree. As the RBNZ aggressively slashed interest rates in an effort to pad its three consecutive quarters of negative growth, traders began selling the isle-nation’s currency. RBA officials too drastically cut overnight rates on fears that the slowing global economy would soon hit home. However,
For the time being, an opportunity to hedge one’s downside exposure is in the works. A buying trend shows multiple-top resistance in the near-future. The entry rate, 1.2260, has been a source of significant selling pressure, spanning from August of this year. As such, we may see a short-term retractive pullback that may lead the pair towards the bottom of the channel shown in the chart below. We will set our target at the intersection of channel support and the 23.6%, 1.2006, fib level of the 10/10-12/08 bull-run. Furthermore, we will set our stop-loss substantially higher than the multiple-top resistance level.
Hedging Strategy
Currency Pair: AUDNZD
Long Term Bias: Bullish
Long Term Position: Holding long
Short Term Bias: Bearish
Short Term Position: Sell above 1.2260, Target: 1.2006, Stop-Loss at 1.2421
1 comment:
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