NZD/USD – Evaporating Yield Advantage, Part II – 12/23/2016

NZD/USD – Evaporating Yield Advantage, Part II – 12/23/2016

Yesterday we talked about how AUD/USD is going to suffer from rising US dollar and also mentioned the reason for AUD/USD to remain pressured.  ( Please check the link ) Similar argument can be made for NZD/USD too.  Many hated the rise from 0.6500 to 0.7500 and tried to short it in vain.  To stick with the short US dollar stance, we were long NZD/USD too ( which you can check out from previous trade idea posts ) and managed to get few hundred pips along the way.

Going forward, RBNZ (Reserve Bank of New Zealand) may take advantage of current situation and talk NZD/USD down further.  As 0.7000 is the key in case of AUD/USD,  0.6500 support level is the key for NZD/USD.  Door towards 0.6000 or even 0.5500 is wide open for NZD/USD.

So keep playing it from the short-side until something changes drastically.  Our EUR/USD short is playing out nicely and patient to look for more short entries have been rewarded by yesterday’s bounce towards 1.0500, as we outlined earlier.

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nzdusd_monthly_chart_dec_23_2016

nzdusd_monthly_chart_dec_23_2016