Asian Session Morning: Low Liquidity and a Look at Kiwi into RBNZ

June 10, 2015

Morning View:
After another risk driven, jumpy evening session devoid of any major news releases, the majors mostly ended up back where they began the day.

Both Cable and the Euro had jumpy rallies on the back of no specific catalyst but poor liquidity and stops being triggered at short term technical levels have been blamed. With all major longer term levels still in tact, there is plenty for traders to manage their risk around still on the table

With the Reserve Bank of New Zealand meeting tomorrow, an interest rate cut is well and truly on the cards. Like most monetary policy decisions, economists and traders are getting cold feet heading into the announcement but I’m tipping a cut and playing the Kiwi from the short side.

Wheeler has talked the talk in the weeks heading into the announcement, successfully jawboning the currency lower warning that cuts are coming if demand and inflationary pressures continue to fall. Economic data out of New Zealand hasn’t delivered but as with big brother Australia, the housing market is always a concern across the major cities when looking to stimulate the economy.

I take a look at the Kiwi from a technical viewpoint in the Chart of the Day section below.


On the Calendar Today:
We have RBA Governor Stevens speaking at the Economic Society of Australia in Melbourne today. The speech is expected to be a broad overview of the state of the economy. You can interpret what that will bring in terms of volatility. These speeches are always a bit of a coin toss either way.

AUD RBA Gov Stevens Speaks

GBP Manufacturing Production


Chart of the Day:
Heading into RBNZ tomorrow, lets bring up a few Kiwi charts again. The NZD/USD short setup from last week’s Technical Analysis News Centre post is still playing out.

NZD/USD Daily:
Click on chart to see a larger view.

We talked about trying to get short heading into the RBNZ decision and as you can see on the daily, price has broken through the marked support level.

NZD/USD 4 Hourly:
Click on chart to see a larger view.

Zooming into the 4 hour chart, that spike up and rejection as soon as it touched our zone is very favourable price action if you’re still short or even looking to add to your position.

As long as you identify where the biggest risks are when you do your RBNZ scenarios then trading around these levels in the meantime shouldn’t be a problem.

Let us know what you’re watching or trading? Leave a comment below or mention @VantageFX on Twitter.

Dane Williams – @VantageFX

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