Jump to content

NZD/CAD Trade Idea


Guest ChrisW

Recommended Posts

There's been interest in shorting NZD/CAD, especially in the wake of last night’s poor Kiwi dairy auction. I would be looking at short positions, placing a stop above yesterday’s high of c$0.89 and adding on a break of the September uptrend.

 

This is quite aggressive and while we have seen a bearish reversal (circled), we still need to see a lower low to confirm the reversal. The momentum oscillators are rolling over, but not giving any huge sell signal so I would keep position sizing small.

 

 From a relative valuation perspective, spot NZD/CAD has diverged significantly from the NZ/CAD 2-year bond spread. As the yield spread premium the NZ 2-yr treasury commands over the Canadian 2-yr declines the pair should follow, but this has not been the case. I suspect we are going to see catch up from spot FX and NZD/CAD should come back in-line as mean reversion kicks in.

 

 On the CAD side my personal belief is an extra c$10b in fiscal spend announced by the new Canadian Liberal government is not going to dramatically alter the BoC’s thinking too greatly! Keep in mind the BoC meet tonight.

 

NZDCAD.jpg

 

This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

 

 

 

 

 

 

Link to comment

Wondering how this trade is going?  I looked at the chart but can't correlate what I see to the one Chris posted (timescale)?

 

It seemed (for the NZDCAD) there was a bit of action - rose a bit then down sharply as suggested, bit of a dance down at those levels and then?

 

Is there an exit point, or ride it out for a few days, or till a Fib level/support?? 

 

Nice trade regardless. 

Link to comment

Thanks

 

I had a look today and can see that surge now.  Thanks to Mario...

I think there might have been a few good points in it anyway pre-ECB.

 

I haven't traded FX for 10years - but the memories of similar moves at midnight (for me) are still pretty clear.  I keep meaning to consider binaries and FX, but am busy enough at the moment. 

Link to comment

Archived

This topic is now archived and is closed to further replies.

  • General Statistics

    • Total Topics
      23,076
    • Total Posts
      95,532
    • Total Members
      43,696
    • Most Online
      7,522
      10/06/21 10:53

    Newest Member
    jimipop
    Joined 04/10/23 17:01
  • Posts

    • Summary: Still expecting another low for indices, the current move up part of a corrective rally. Normally I look for indices lead from stocks, however some stocks are displaying strength and some weakness so this mix bag is showing up in the Nasdaq 100 pattern as a probable wave four triangle at the current low. Trading Strategies: Nil Video Chapters 00:00 SP 500 (SPX)  05:02 NASDAQ (NDX) 08:26 Russell 2000 (RUT) 10:43 DAX 40 (DAX) 16:07 FTSE 100 UKX (UK100) 22:15 ASX 200 (XJO) 38:47 End Analyst Peter Mathers TradingLounge™ Australian Financial Services Licence - AFSL 317817 Source: tradinglounge com   Access Trial  
    • A lot of transformation is happening to BNB at the moment with the integration of bitcoin lightning network and Optimism especially with opBNB birth but that has not reflected in users confidence primarily because of the many negativities surrounding the platforms operations in North America and Australia. BGB on the other is gaining traction and value because a lot of investment is going into the development of the ecosystem recently with the injection of $100M and also improved partnership deals
    • I know we still have a lot to do to attract massive crypto adoption but steps like those taken by Binance and bitget in the wake of what happened to FTX is commendable in righting the wrongs of the lapses and loopholes that exist pre-FTX saga. But more still needs to be done to restore confidence to the level it was pre-2020 bear market like consistent regulatory framework and regular security updates by crypto platforms
×
×
  • Create New...
us