Caution on Shorting Kiwi Dollar

Caution on Shorting Kiwi Dollar

Entering Short with caution that the Kiwi Dollar had been to areas that tested support in the zone that contained the NZD’s moves against US Dollar since 2016.

While knowing that a hike in US interest rates would further strengthen the USD and the NZDUSD looking to remain almost directionless and fluctuate within a range, we had expected a drop and so entered a sell trade and went short NZDUSD.

Our analysis was showing that the hike in US interest rates would give the US Dollar strength to break out that zone, however if for only a short period of time, as can been seen on the chart and confirming our expectations, a large candle has developed at the right of the chart with a large wick at the bottom, if the downward price of the NZDUSD was happening then it was probable that this would only be temporary.

We believe a build up of buyers had been waiting at around or just below the 7000 mark stopping any further drop for the Kiwi Dollar, we waited patiently for a further drop in price as sellers battled with the buyers for supremacy.

We didn’t have to wait long before the sellers had control and took price downward, we decided profit is still profit and be grateful and to move on to the next trade before the buyers enter back into the market for more.

Kiwi Dollar

(Our trading and image was done using an account with UK based broker IG)

*Please Note, Forex and other forms of trading carry a high level of risk to your capital as you could lose all of your investment. These products may not be suitable for every investor, therefore ensure you understand the risks and seek independent advice. Invest only what you can afford to lose. We are NOT financial advisers and we do NOT offer financial advice. 


Leave a Reply