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5th Wave Almost Complete - SELL The BreakdownGood evening traders, The NZD has been on a monster rally over the past month. Looking across multiple pairs, the NZDCAD and NZDUSD are setting up very similar scenarios. We can see a nice 5 wave structure higher with a trend line support in play. We are waiting for a breakdown from the trend line support to enter a short position on the pair, expecting an ABC corrective structure. Stop losses will need to go above the most recent swing high. Any thoughts our comments are welcome.
Short
by Trading_Tony
1
ridethepig | AUDNZD Market Commentary 09.12.2020📌 Buyers attacking and maintaining the pressure! Since the initial weakness we spotted at the lows, we have seen the birth of an impulsive leg higher: Of course this is very promising, buyers have much rather played the breakup and we got our momentum gambit! Well, for those wondering what rendered the base as valid, I would point you in the direction of the NZ10Y chart which was calling for the end of NZD strength as soon as we approach the 1.00% target. We must be clear that in AUDNZD 1.055x contains a lot of interest, the ambitious dream of forcing a straight leg towards 1.075x and forcing our opponent into complete capitulation is far from fiction. We can now attack the breakout and force the aggression. The continuation might be 1.055x -> 1.062x -> 1.075x which keeps NZD under pressure. Thanks as usual for keeping the feedback coming 👍 or 👎
Long
by ridethepig
5
ridethepig | NZD Chart of the WeekThis chart update comes after the conversation with @YIQI.... We are tracking how the following elegant defence can hold a breakup through, namely the main target in NZ 10Y Yields: For those who remember, the sweep and breakup was what we had our eye on. A move from 50bps to 100bps was very fancy! And now we have for ourselves a change of scenery! The previous flow must unwind, and in plan of their new attack we can ride the profit taking. Sharp sellers are itching to attack, 0.705x should be able to hold, I am in full sized positions. Thanks for keeping the feedback coming 👍or 👎
Short
by ridethepig
8
ridethepig | AUDNZD Market Commentary 02.12.2020There was apparently no motivation for sellers to continue the advance lower and neither does it seem pragmatic. AUD buyers are showing up once more and this looks like the prelude to an exciting momentum gambit. The trigger comes from a leap above the latent highs, it will move us forward full of energy as shorts start covering and the youthful arrogance of those reluctant to close get margin called. I choose to answer the lows with a gentle position, no more than one or two in the start, and the quietness of a worthwhile virtue. The whole business of markets is about the advance for our momentum, because the traps have already been set, sellers still think they have won, but only when we zoom out on the macro charts can we truly demonstrate the underlying AUD strength. So I would tend to describe the above floor as cheap and open. With clearing month end flows and markets trying to get their 2021 trades on early with commodity shortages entering into the picture already, we should emphasise exposure in AUD. Of course, Australian and China relationships are not working perfectly, although I expect this will be the story to track in 2021 rather than December 2020. Thanks as usual for keeping the feedback coming 👍 or 👎
Long
by ridethepig
9
ridethepig | NZDUSD Market Commentary 2020.11.25📍 My dear readers, it is clear what we are trying to achieve here.... a protection of the highs / resistance with initial targets at our centre / pivot and extension targets below at support. The control which belongs to buyers is blockaded and open to attack. It is expensive to maintain the highs; this means that the necessary pullback when energy exhausts is all too easy to ride. It appears quite appropriate to consider the Dollar selloff exhausted and an advance in DXY via extreme risk-off flows as investors look for cover under the table. Keeping a close eye on 0.70c as it turns out to be deceptive for buyers as the government is clearly feeling pressure from the RBNZ QE approach. Look to buy NZD but from cheaper levels, until then... looking to play the retrace lower. Thanks as usual for keeping the feedback coming 👍 or 👎
Short
by ridethepig
6
ridethepig | Replacing the defence in NZ YieldsComparing NZ 10Y Yield with AU 10Y Yield we can see the divergence opening up. The local stories in NZ are looking a lot worse than in Australia for now, depriving the NZ 10Y Yield of completing the base formation. On the currency side, the strategic link between AUD and NZD is being threatened by AUD breaking up and flirting to complete the leg towards 1.12 - something we have been tracking since June: On the technical flows, the NZ10Y can sweep 0.5% comfortably, where it would be then able to replace the current defence with a more solid structure for a move back towards 1.0%. Thus the 🔑 to answering direction for NZ10Y comes only with more time elapsing.
TVC:NZ10YLong
by ridethepig
2
ridethepig | NZDJPY Market Commentary 2020.08.15So much for the round of chart updates...@ridethepig has been taking some time off this summer to prepare for a very busy September onwards. 📌 NZDJPY retrace swing is running out steam at the 69.9x / 70.0x highs. While risk remains in the background despite the political fairy-dust, the urge to park capital in the Yen has been maintained but for how much longer? A dovish RBNZ has provided us with a freeing move to the 59.5x lows with a clear direction from foreign asset purchases and -ve rates coming. => Firstly think of the curious circumstances we are looking at when analysing the global macro outlook. The blockade set via inflation and Yields usually turns out to be a severe recession in all respects: => Secondly the momentum is building and confirming the likely sustainability of the NZD outflows and JPY inflows as a double whammy. Positive momentum is coughing after six weeks of chop, this all embracing struggle, is only a means to an end. Remember the importance to strive for mobility, when your central bank confirms its lust to expand the overdraft and buy anything that moves overseas is always sending the currency in one direction. Also for those particularly interested in the region and given the divergence with positive Aussie macro data overnight, it’s no surprise to see AUDNZD continue the grind higher. Sooner or later the NZD capitulation will show itself in NZDJPY and the leg towards 59.5x has appeared. Invalidation in the board will come via a sustained breach above 73.3x. As usual thanks for keeping the feedback coming 👍 or 👎
Short
by ridethepig
12
EURNZD Buy Update - Upcoming RBNZ Interest RateWe have large NZD news coming up in a few hours @ 10 PM EST. Watch for a break above current consolidation range or a pull back to bottom of consolidation range. Bias direction is still upwards so I would only look to buy. Entry: Enter at breakout of consolidation range 1.7930 Enter at bottom of consolidation range 1.7723 TP 1 @ 1.7962 area TP 2 @ 1.8196 area Good luck trading! Please help like these free analysis so others may benefit from it. Let me know how I can help you. Charles V www.cvfxmanagement.com Trading made simple.
Long
by cvfxwealth
2
ridethepig | Dovish RBNZ Pricing & Commodity Shortages📍 RBNZ formula So what are we trading here? In this position it would be an obvious mistake to not acknowledge risk sentiment worsening over the weekend as cases continue to escalate, clearly the market is exposed to the storm (that is to say the series of localised lockdowns are a done-deal, the only question remains whether it becomes more widespread). On the monetary side, the correct flow to shelter from if things materially worsen (sadly looks inevitable) is the dovish RBNZ. After the latest meetings they have opened the window for a game changer on the stimulus front coming in August (via lowering domestic borrowing costs). Consider the situation on the AUD side of the equation: Commodity shortages are entering back into play via the Covid shock which is a prelude towards the monetary crisis. Gold, Iron Ore, Copper and etc all look set for further advance; it will keep the basis for some action to the topside in AUD via collateral. Here tracking closely 0.677x in AUDUSD and 0.637x in NZD as the line in sand for the cross. Look to ride AUDNZD up towards the 1.12 macro targets. As usual thanks all for keeping the feedback coming 👍 or 👎
Long
by ridethepig
ridethepig | EURNZD Trade of the Week📌 In spite of the overshoots to the downside, what we are trading here is a sacrifice... the 'sad tale of the last seller'. I love it when sellers go overboard. Threatening to breakdown, without realising the RBNZ has opened the August window for more free money and NZD devaluation via purchases. The euro occupies the throne in G10 which the dollar has vacated.. We all have our eyes on unity on the fiscal side, and a change of scenery! The euro continues its dance. The purpose of this move is to put into action the debt mutualisation / consolidation. But the move versus USD is becoming more difficult as risk approaches the horizon via Covid. In any case... time for a nice late breakfast while positioning in a dangerous situation. Thanks as usual for keeping the feedback coming 👍 or 👎
Long
by ridethepig
1
ridethepig | NZD Market Commentary 2020.07.02📍 NZDUSD : NFP Positional Play This is an example of an erroneous defence. In similar style to that of the GBPUSD position, the highs 0.652x can be defended, since it unlocks an impulsive position which is somewhat cramped via RBNZ adding more free money to the pot. Buyers attempt at breaching the highs should be opposed, we have risk in play via Covid and Brexit, not to mention bankruptcies around the globe skyrocketing. Dark clouds on the horizon despite how the politicians attempt to sell re-openings as 'independence'. NZD and High beta FX will struggle to rally as long as the market is still concerned about further lockdowns in Australia as NZ will follow their lead. Tracking the same “lines in the sand” with 0.677x AUDUSD and 0.637x NZDUSD. ⚡️ US DATA PREVIEW: Primary Dealer Nonfarm Payroll estimates - RBC 8.0mn - Natwest 7.2mn - Citi 5.5mn - Morgan Stanley 5.285mn - BNP Paribas 4.5mn - Goldman Sachs 4.25mn - HSBC 4.0mn - Scotiabank 4.0mn - TD 4.0mn - SocGen 3.9mn - BMO 3.5mn - Wells Fargo 3.3mn - Credit Suisse 3.0mn - JPMorgan 3.0mn - BAML 2.8mn - Daiwa 2.5mn - Deutsche 2.5mn - Mizuho 2.5mn - Barclays 2.0mn - Jefferies 1.95mn - Nomura 1.5mn - UBS 1.5mn - Dealer Median: 3.4mn => So if we can sum up by saying, RBNZ is preventing NZD of moving higher and is of greatest important when considering a macro positional flow. On the other hand, USD seems more appropriate as a place to park until the storm passes. What we are talking about is outguessing extreme risk for the long weekend with the NFP knee-jerk flow. A very advanced and extremely bold call. As usual thanks for keeping the feedback coming 👍 or 👎
Short
by ridethepig
9
ridethepig | EURNZD July Macro Swing📌 Here tickets are very cheap for those wanting to exploit the NZD weakness via dovish RBNZ. While on the European side, a direct consolidation of the debt, sacrificing Merkel to save the currency. Complex but totally tradable flows. => After the textbook move in EURUSD Euro crosses can almost equalise. In cramped consolidation, you cannot afford to give any easy entries, the false break ruins those soft retail expecting an easy move! Actively looking to build full positions at 1.7325 for the coming weeks and month. A long journey ahead with 1.78 as the main goal, in order to support as best it can the slingshot will move with direction action (instead of a zig-zag).
Long
by ridethepig
2
ridethepig | NZD Long-Term Macro Map 📍 NZDUSD Long Term Macro Map An ingenious saving move from buyers, which is extraordinarily difficult to defend. The slingshot, you should also note is an advance momentum play. These come around only once or twice in a cycle, in cramped positions you cannot afford to give opponents free tickets and allow them to make an easy ride. The shakeout was flawless, now buyers are in a much better position from the lows as anticipated: On the NZD macro side, it's the same story everywhere with consumer confidence in the red and credit card spending low. RBNZ bazooka doubled their purchasing program to 60bn NZD last month, while rates are starting to find a floor and look cooked here till 2021. Arden is a breath of fresh air, the handling of the crisis was superb - as New Zealand begin unwind the social distancing we can see the Kiwi find strong demand as her leadership has not gone unnoticed! Updates comes to the AUDNZD chart tomorrow, those who wish to make their fortunes in the crosses will have to wait till later in the week. The limits of 10 charts a day on @tradingview are proving restrictive in getting the entire board updated. In any case, the supple, flexible and sometimes sincere NZD targets for 2020 remain at 0.675x and 0.755x for 2021 respectively.
Long
by ridethepig
2
ridethepig | NZD Market Commentary 2020.05.26It is evident that a general round of profit taking for buyers is called for, it will act as a catalyst to kickstart a fresh leg into USD and provide a helping hand from markets to put -ve rates back on the table for Fed. One more time it is all eyes on Equities, if those betting on a quick V-shaped recovery lose their tempo we can see blood on the streets. The squeeze higher in NZDUSD is healthy into month end from a strictly positioning perspective. The USD Long boat was heavily loaded to one side and needed a shake-up. The sweep lower in AUD and NZD will demonstrate the exploitation of Keynsian economics. By pushing the USD bid the obvious collateral damage in EM FX and High Beta FX can easily lead to pressure on the inelasticity between Whitehouse / Fed combo. Watch-out for wild swings ahead, we can cover the flows live below.
Short
by ridethepig
4
Long AUD/NZD, targeting 1.1000Recent developments A dovish RBNZ policy announcement has been conducive to the pair's push to a six-month high. Further monetary policy of asset purchases over negative rates was largely expected. Technical analysis The pair has given back a bit since rallying at its fastest pace since 2014 (around 7% increase in just over a month). If it can break past previous 1.0850 key level, then there should be a chance to test 1.10 or at the very least trade up the channel with ease. Primary drivers for a further move up On the fundamental side, elevated risk sentiment on the backdrop of bottoming growth in markets, as well as the continued divergence between RBA and RBNZ should support the upward direction of the pair. Policymakers have remained quite dovish, which should be risk-positive as central banks have incentive to ease rather than tighten. With that being said, the RBNZ policy stance is looking more dovish than the RBA's. We can look at both policy stances and yield curves for an indication of what's to potentially come. The RBNZ have kept the official cash rate at 25 bp, while the base of asset purchasing have been expanded to a cap of NZ$60bn. Although the market seems to be pricing in negative rates, I don't think it's likely that we will see that, given that the RBNZ effectively guided that it won't happen (at least for this year - although this could be on the cards for 2021). Why lose all credibility on forward guidance when there are other methods of easing such as bond purchasing or fixed term loans? Either way, the base case is further easing and I would look towards August and June meetings as further catalysts if financial conditions tighten. On the contrary, the RBA has stopped purchasing bonds since early May after hitting 25 bp on the 3Y; keeping the curve at the current levels should be supportive to Australia, which remains a relatively high yielding Aaa country (despite slight rating downgrade). Risks Downside risk on AUD/NZD lie in 1) narrowing policy differentials, 2) risk sentiment softening, 3) and/or a more hawkish RBNZ that would lead to NZD strength, thus pushing the pair lower. As such, targeting top end of the channel 1.1000 with a stop of 1.05985.
Long
by Miloslaw
6