Dave Floyd
Aspen Trading Group
This is a question that came in regarding a possible short entry in NZD/USD as I had discussed earlier.
-----------------
Hi,
Would it be too much of a chance to short NZD/USD now ?
Thanks,
Marco B - Switzerland
-----------------
Hi Marco,
Great question and the answer is: it depends.
But seriously, I think we all can get caught up in trying to be too perfect in our entries at times.
Risk can always be managed, so if you can define the risk and select your lot sizes accordingly, then it may make sense to build a short position here.
Let's review the trade parameters first:
- Assuming the S&P's stall into projected resistance and resume the downtrend, pairs like NZD/USD will track lower too.
- NZD/USD is already lagging the move higher in the S&P's. Thus all else being equal, one would assume that it will be weaker than the S&P's when the downtrend resumes.
- Thus, as long as you are willing to give yourself a relatively wide stop and start building a short position (allowing for more upside if S&P's rally) it is a pretty robust case for being short NZD/USD in my opinion.
Aspen Trading Group´s FX Commentary, including any content or information contained within it or Aspen Trading Group´s web site, any site-related service, is provided “as is”, with all faults, with no representations or warranties of any kind, either expressed or implied, including, but not limited to, the implied warranties of merchantability, fitness for a particular purpose, and noninfringement. You assume total responsibility and risk for your use of Aspen Trading Group´s commentary/website, site-related services, and hyperlinked websites.
Recommended Content
Editors’ Picks
AUD/USD appreciates amid hawkish RBA ahead of policy decision
The Australian Dollar continued its winning streak for the fifth consecutive session on Tuesday, driven by a hawkish sentiment surrounding the Reserve Bank of Australia. This positive outlook reinforces the strength of the Aussie Dollar, offering support to the AUD/USD pair.
USD/JPY extends recovery above 154.00, focus on Fedspeak
The USD/JPY pair trades on a stronger note around 154.10 on Tuesday during the Asian trading hours. The recovery of the pair is supported by the modest rebound of US Dollar to 105.10 after bouncing off three-week lows.
Gold price extends recovery as markets react to downbeat jobs data
Gold price extends its recovery on Tuesday. The uptick of the yellow metal is bolstered by the weaker US dollar after recent US Nonfarm Payrolls (NFP) data boosted bets that the Federal Reserve would cut interest rates later this year.
TON crosses $200 million in Total Value Locked as its network integration continues to scale
In a recent development, the TON network surpassed $200 million in total value locked on Monday after seeing a major boost through The Open League reward program.
RBA expected to leave key interest rate on hold as inflation lingers
Interest rate in Australia will likely stay unchanged at 4.35%. Reserve Bank of Australia Governor Michele Bullock to keep her options open. Australian Dollar bullish case to be supported by a hawkish RBA.