1) This trade is going to be attractive to carry traders. 2) Looking like RBNZ will continue rate hikes. 3) Poor NFP gives NZD the strength edge in this pair.
Technicals on chart showing favour to the long side.
The RBNZ won't raise rates anytime soon I think, Wheelers comments regarding the NZ dollar strength give us an implication that this won't happen. Also keep in mind the RBNZ are not averse to more direct action in the currency market if they see fit.
A rate cut is also improbable as an already over-heated housing market has been identified as the major risk to the economy, to quote Wheeler (Feb):
“Our concern about house price inflation is based on the risk it poses to financial stability and the broader economy. Although it has not been a major factor in recent years, high rates of house price inflation can spill over into stronger spending and pressure on consumer price inflation.
“And the more that house prices get out of line with historic relativities, the greater the risk of a sharp correction, leading to financial instability.”
RBNZ will be looking at macro-prudential methods to cool the housing market.
johnny_trades
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nice bouce
MrBudFox
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There is no way that the US are going to increase interest rates anytime soon , imagine paying of their debts at higher rates , inflation is very weak , increasing rates will drive the economy into a hole the FED knows this and they don't want to scare the market , the market will realize that rates in the US aren't going anywhere , and traders can get the carry on the kiwi which will favor the upside. Weekly chart put in a nice reversal pin bar bottom, and monthly trend is printing higher highs , im long from 7550 tgt 7950, patience will pay , thanks for the chart sir.
IvanLabrie
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Yes sir, agreed.
A look at Chris Moody's COT indicator sheds some light as well.
Plots entries when commercials change from net long to net short and viceversa.
I'll publish this one, to keep track. I had charts on gold and the euro, thanks for bringing this up.
A rate cut is also improbable as an already over-heated housing market has been identified as the major risk to the economy, to quote Wheeler (Feb):
“Our concern about house price inflation is based on the risk it poses to financial stability and the broader economy. Although it has not been a major factor in recent years, high rates of house price inflation can spill over into stronger spending and pressure on consumer price inflation.
“And the more that house prices get out of line with historic relativities, the greater the risk of a sharp correction, leading to financial instability.”
RBNZ will be looking at macro-prudential methods to cool the housing market.