Long EUR/NZD trade from 28-Jul to 4-Aug
The following is comments that relate to our long EUR/NZD trade from 28-July to 4 August. The initial comment on the trade is at the bottom, from there the s/l was raised until the trade was closed on stop, but in profit
Real Time AmpGFX – preview of Aust data and NZ MPS
Positions
Long 1.5 units AUD/NZD at 1.0711; s/l 1.0647; t/p 1.1223
Note that we were stopped out [in profit] of the long EUR/NZD position on Friday,
Real Time AmpGFX – raised EUR/NZD s/l
Positions
Long half unit EUR/NZD at 1.5680; s/l 1.5873; t/p 1.6500 (s/l raised)
Long one unit AUD/NZD at 1.0707; s/l 1.0647; t/p 1.1223
Real Time AmpGFX – NZ labour data not all bad; s/l orders raised
Positions
Long half unit EUR/NZD at 1.5680; s/l 1.5787; t/p 1.6500 (s/l raised)
Long one unit AUD/NZD at 1.0707; s/l 1.0647; t/p 1.1223 (half unit trades consolidated, s/l raised)
Real Time AmpGFX – Raising EUR/NZD s/l; Tue 8/1/2017 2:31 PM MST
Positions
Long half unit EUR/NZD at 1.5680; s/l 1.5737; t/p 1.6500
Long half unit AUD/NZD at 1.0695; s/l 1.0633; t/p 1.1223
Real time AmpGFX – bought EUR/NZD; Fri 7/28/2017 8:12 AM MST
Bought half unit of EUR/NZD at 1.5680
German and Spanish CPI were stronger than expected.
European economic reports continue to show strength and stability. Core inflation appears to be rising and may surprise upside expectation next week.
NZ employment data expectations are quite solid. I see a risk that they ease rather than improve further with the economic growth numbers in recent quarters in NZ soft and broader indicators of the economy more mixed this year. While immigration has yet to turn down
The EUR is tough to buy close to multi-year highs. But it has held well after breaking key resistance around 1.15 and has been grinding out gains. It has surged against the CHF, consistent with a market unwinding post ECB QE weakness.
CFTC trader positioning is at near record long EUR, but it is also it seems extremely long NZD. EUR rebound is more likely to be driven by non-trader real money/corp unwinding of sold EUR hedges.
US data was close to expected, although a bit below, including the GDP and ECI reports on Friday. University of Michigan consumer sentiment firmer and inflation expectations holding recent improvement. The US payrolls data next week should remain relatively solid considering recent US data is holding firm, and leading employment indicators are still solid.
The USD may appear to have built in a more subdued path for rates and political risk. The downside risk remains, but there is also potential for relatively minor improvements in the data or political wins to support a recovery in the USD.
A rebound in the USD seems more likely to undermine the NZD than the EUR.
The ECB appears to have done all it can to downgrade the expectations of policy normalization. The data, on the other hand, are likely to embolden the hawks to ignore the gains in the EUR exchange rate at this stage.
Global bond yields are showing some signs of resuming their rise, driven by stronger global growth, & higher industrial commodity prices. Higher global bond yields may tend to weaken high yield demand for NZD.
Technical resistance for EUR appears limited until near 1.20/1.22
The NZD is currently in the middle of a previous trading zone in the first half of 2015 and may find upside potential slower going.
Positions
Long half unit AUD/NZD at 1.0644; 1.0533
Long half unit EUR/NZD at 1.5680; 1.5473; t/p 1.6500