Nzd.usd

[FTG]

Didn't take long to get an answer!

Wave 4 was a shallow retracement, not even reaching 23.6% - hence demonstrating weakness.
Wave 3 low has already been taken out. Wave 5 should bottom in the 0.7717-0.7761 range

[bogus1]

so the universe is connected , i reckon fph is a great currency play when confirms

[arco]

bo

I've got the FPH low as 18/4 @ 2.75, so that would alter the bot parameters

????

rgds - arco

[arco]

Forex Focus: The Kiwi May Be Leading Carry Trade Reversal


By Nicholas Hastings

Just as the canary was an indicator of poisonous gas in coal mines, the kiwi could prove to be an indicator of a fall in global liquidity.

Look at the way the New Zealand dollar fell off its perch despite the hike in New Zealand interest rates by 25 basis points earlier this week.

With New Zealand rates now up at 8.25%, this hike made the highest-yielding of the 10 major traded currencies even more attractive. However, investors still shied away, as concerns over a credit crunch rose and global appetite for risk faded away.

The Reserve Bank of New Zealand could be at least partially to blame for the losses.

It tried to play down the rate rise, suggesting that after four successive hikes, rates are probably high enough to keep a lid on inflation.

RBNZ Governor Alan Bollard said: "New Zealanders have been showing early signs of moderating their borrowing."

Bollard also helped to discourage any bullish reaction by the kiwi by warning once again that the currency is hurting the export sector and that its current strength isn't sustainable. Earlier this summer, the central bank intervened in an attempt to halt the currency's advance and the threat of a repeat exercise remains.

These comments help to explain the kiwi's reversal, with the market now looking to economic evidence over the next few weeks that the rates don't need to be hiked any further.

"The performance of the New Zealand dollar remains data dependent," said Sharada Selvanathan, a current strategist with BNP Paribas in Singapore.

However, the New Zealand dollar's somewhat unexpected decline also comes at a time when global investment flows may be starting to shift.

A steady rise in concern over U.S. subprime mortgages over the last week appears to be spreading into other markets, with each day bringing reports of financing difficulties being faced by corporations as the global appetite for risk dries up.

Apart from poor earnings forecasts from financial institutions and companies directly affiliated with the housing market, other companies are finding that they are having to pay considerably more in the corporate debt market as lenders shy away.

This week, the purchasers of a GM transmission subsidiary, the private equity buyers of Chrysler and Alliance Boots have all faced difficulties putting together debt packages.

This decline in liquidity is also being reflected in global equity markets, where prices are tending to sink unless they get support from improved earnings reports.

Risk aversion also continues to rise with the latest reading of the UBS Risk Index showing another steady increase, suggesting that interest in carry trades, whereby purchases in high-yielding currency assets are funded by selling low yielders, is on the wane.

For high-yielders, such as the New Zealand dollar, this could spell the end of recent support that has pushed them steadily higher at the expense of low-yielding currencies such as the yen.

"The RBNZ's rate decision provided the clearest hint yet from any of the major monetary tighteners that rates may have peaked, albeit the hint was heavily qualified," said David Simmonds, head of foreign exchange strategy at The Royal Bank of Scotland in London.

The key thing now is whether the kiwi will continue to decline, reflecting the decline in global liquidity as investors pull back into lower risk assets, or whether it will once again track rate hike expectations on the basis on New Zealand economic data alone.

Steve Barrow, chief currency strategist with Bear Stearns International, reckons that although the rate cycle may not yet have changed, "the kiwi will continue to peel back" in the short term.

Over at RBC Capital Markets, senior currency strategist Adam Cole argues that little has changed.

"This is not the New Zealand dollar-negative story that the knee-jerk reaction suggests," he said.

"For the extreme high and low yielding currencies in particular, recent price action has overwhel

[arco]

I have some active Gann support circa 7720
(perhaps for a wee bounce)

If /or when this breaks theres another powerful
support awaiting down below circa 7464 (active)

arco

[bogus1]

when im messing around looking for patterns sometimes i will play around with the x point to see if the harmonics are improved and i felt this was valid as there was a significant rally from that x point. i know its not for the purists.

[arco]

bo

Scott is quite specific with the Bat - the parameters MUST stack up otherwise is ain't a Bat.

The pattern incorporates the 0.886XA retracement, as the defining element in the Potential Reversal Zone (PRZ). The B point retracement must be less than a 0.618, preferably a 0.50 or 0.382 of the XA leg. The Bat utilizes a minimum 1.618BC projection. In addition, the AB=CD pattern within the Bat is extended and usually requires a 1.27AB=CD calculation.

rgds - arco

[FTG]

Hi Arco,

That 7720 fits in nicely with the 7717 I mentioned earlier. After a very good run today on the short side I have now reversed and gone long; entry 7740 - hopefully for a decent bounce. Running a 40 pip stop, so hopefully I haven't picked the turn prematurely.

What a beautiful day it has been!

[FTG]

I got knocked out of that rather quickly. Teaches me right for getting to cute and not keeping to the basics!
Oh well, still a very successful 24hrs overall.

[arco]

FTG

When the trend is still dubious, my tactic with Gann level bounce trades is to take a small number of pips on 75% of the position based on a 50-618 fib calc of the retrace, and then let a small balance ride. In this case 7801 (50%) for 40 pips.

Its easy to get back in if you get a wave 1 retrace.

rgds - arco