AUDNZD? A big short developing?
Today saw the release of Australian CPI and it wasn't overly pretty for the RBA. The market has come out blazing with most economists calling for a May cut which has taken it's toll on the AUD. I have been tracking this pair for a while and the big picture lends itself to an expectation of lower prices. One needs to keep the big picture in mind though whilst we look at the finer print.
I've been tracking a larger picture 5 wave move in this pair and now it looks like we might be ready to embark on a B wave move back down to the 105 area. Naturally, anything can happen after that time, and if it plays out how I think, then we might get that C wave correction and a chance to catch the wave 3 move as the subwave of the large wave 5 move (confused yet? I am, hahaha)
So I will look for the corrective move of this current impulse to try and take a short with a target around 105. It's up to the individual as to where to enter, but I always like to see a 50% retrace as that will give my stop plenty of room. I will update with a stop level once I have entered
I've been tracking a larger picture 5 wave move in this pair and now it looks like we might be ready to embark on a B wave move back down to the 105 area. Naturally, anything can happen after that time, and if it plays out how I think, then we might get that C wave correction and a chance to catch the wave 3 move as the subwave of the large wave 5 move (confused yet? I am, hahaha)
So I will look for the corrective move of this current impulse to try and take a short with a target around 105. It's up to the individual as to where to enter, but I always like to see a 50% retrace as that will give my stop plenty of room. I will update with a stop level once I have entered
Trade active:
Time to start entering here I think. I have stops above the impulse at 106.70
Comment:
Another quick note, don't expect this trade to bear any fruit until May 7th and May 8th (Australian dates) When the RBA and RBNZ have their policy meetings. The other big outlier is the NZ Unemployment number, due out on 1st May (once again Australian time. Check your own calendar for the time and dates for your home town)
Comment:
I will look to cover at B wave retracement levels around 105 to cover if the pair can get their before the meetings
Comment:
NZ trade data today and the pair is resting on some luke warm levels around 105.70-80 so you could be forgiven for taking something off the table here, but the data (due out in about 2 hours from time of writing) could give the pair a fresh kick along. Only time will tell
Comment:
NZ trade data was very strong, but a very muted reaction in NZD so that signals caution. I am just going to sit and wait here as there is a chance the pair rallies from here after the strong performance of NZD last session
Comment:
Watching AUDNZD very carefully here. Gut feel is that it might be out of puff to the downside for now. The antipodean currencies have had a very nice bounce in the last 24 hours, so they could be excused for trimming back a little and early indications seem to be that selling NZD is the favorite. I am close to cutting the position and going into watch mode and waiting for the next raft of data. Tomorrow brings the latest Chinese trade data and that could boost the AUD vs the USD and hence push the AUDNZD higher. Also, the oscillators are starting to turn back up, so some warning signs that it's nearly time to take the money and run with a view to re-enter at higher levels
Trade closed manually:
Time for me to cover. I think we have milked it as far as we can for now. Time to get square and wait for the next round of data