ja_mageia

NZD/AUD 1.2588 - 1.2802

Last Week: 

Quite an amazing week really, especially Friday.The charts had suggested a move higher for the USD on breakout trades and comments from the ECB and RBA had hinted at lower interest rates and a sell-off in the EUR and AUD. Also, offers in the USD/JPY had allowed for the JPY crosses to head lower across the board.Although we had called these moves,  they have extended much further than most of the market would have expected.Whilst the Oil price closed at a very low level on Friday, and there was a huge short squeeze on USD short positions in the market, there is a chance that these moves have been overdone. 

What we did: 

We remained short of the AUD and NZD through cash and options and profited by the sharp moves lower.  We had tried to stay short EUR/USD, but large volatitliy meant that we missed the  move down on that one.  

This Week: 

There were good consumer confidence numbers over the weekend in NZ, so there’s potential for a small bounce in the NZD. We look for a recovery of some sort on Monday through Wednesday this week for EUR/USD, AUD/USD and NZD/USD, before establishing new ranges that may remain into election announcements in both N.Z. and the U.S.A.  Australian consumer confidence, NZ PPI and Retails Sales data later in the week will provide short term direction for both the AUD and NZD. The AUD/NZD looks to be forming a base in the 1.2580/00 area for a look higher. 

What we will do: 

We will look for moves in the Oil, Gold and Dow to confirm this agressive adjustment to the level of the USD.  Paying particular attention to the Oil price, as the tensions between Russia and Georgia have the potential to escalate and push Oil higher. Whilst trading the inevitable new ranges in AUD and NZD, we will look to pick up AUD/NZD on dips for another look higher.