NZD/USD: KIWI the bird OR KIWI the fruit falling off the tree?
Updated
hello, hi fellow traders,
simple chart only with horizontal support levels, but all represent important levels that provided high volumes of trading during the past times.
my bias: the nearing deep to act as safe buy/long with target by the end of Q1/2023 above 2021 highs. as I expect the central banks interest rates "drama" to get finished by then and the world's economies will get much more stable and forecasting demand for commodities will get clear and New Zealand will have much higher demand for their exports (positive for KIWI == the bird scenario).
meanwhile, in the short term, say the rest of H1/2022 we are about to experience volatile price action. the mix of unclear interest rates policies, geo-political tensions, frequently changing GDP growth forecasts, all these make the "fear" in the market to have the upper hand. promising a deep in the time horizon mentioned. now, how low the exchange rate of NZD/USD will go during that process? (== "guessing" time)
actual investment strategy: accumulating around current 2022 lows and within the 0.60-0.65 cluster seems optimal
what if it goes under 0.60? (== KIWI the fruit falling off the tree scenario) -- first, this is highly unlikely in my core view. second, the financial trading business offers very good instruments to collect premiums when the market goes for awhile beyond ranges. the best strategy in such case would be to SELL/WRITE CALL options 1-3 months further 3%-5% above the cost of the position (== selling covered call - you cannot lose more but only to make less in case the market expires in the money). optimal case here, the premiums collected expire out the money and the position in the money, while the next leg UP will start just after the expiry out the money. but, do not get too busy with that, you always can open new longs not being part of the running longs that are involved with the options strategy. this is MONEY/POSITION/TRADE/RISK management of bit higher grade. not really a thing for day traders or near future swing traders. this is management of an investment.
further, how lower this pair will go during the weeks before turning higher the coming months? == risk management
patience and well established plan will do a good work for you. I have no clue if this one will turn into great money making investment, I know that the worst case scenario is not a pain making loss and failure in this pair means that there is another great making making investment running in parallel as soon and IF that 0.6000 barrier falls on quarterly close basis.
summary: buy the deeps carefully, be patient until 2021 highs will get taken. investment it is, not a trade!
just my analysis/opinion, nothing more than that, nothing less than that. can be dead wrong or lucky "fluky" right
good luck
simple chart only with horizontal support levels, but all represent important levels that provided high volumes of trading during the past times.
my bias: the nearing deep to act as safe buy/long with target by the end of Q1/2023 above 2021 highs. as I expect the central banks interest rates "drama" to get finished by then and the world's economies will get much more stable and forecasting demand for commodities will get clear and New Zealand will have much higher demand for their exports (positive for KIWI == the bird scenario).
meanwhile, in the short term, say the rest of H1/2022 we are about to experience volatile price action. the mix of unclear interest rates policies, geo-political tensions, frequently changing GDP growth forecasts, all these make the "fear" in the market to have the upper hand. promising a deep in the time horizon mentioned. now, how low the exchange rate of NZD/USD will go during that process? (== "guessing" time)
actual investment strategy: accumulating around current 2022 lows and within the 0.60-0.65 cluster seems optimal
what if it goes under 0.60? (== KIWI the fruit falling off the tree scenario) -- first, this is highly unlikely in my core view. second, the financial trading business offers very good instruments to collect premiums when the market goes for awhile beyond ranges. the best strategy in such case would be to SELL/WRITE CALL options 1-3 months further 3%-5% above the cost of the position (== selling covered call - you cannot lose more but only to make less in case the market expires in the money). optimal case here, the premiums collected expire out the money and the position in the money, while the next leg UP will start just after the expiry out the money. but, do not get too busy with that, you always can open new longs not being part of the running longs that are involved with the options strategy. this is MONEY/POSITION/TRADE/RISK management of bit higher grade. not really a thing for day traders or near future swing traders. this is management of an investment.
further, how lower this pair will go during the weeks before turning higher the coming months? == risk management
patience and well established plan will do a good work for you. I have no clue if this one will turn into great money making investment, I know that the worst case scenario is not a pain making loss and failure in this pair means that there is another great making making investment running in parallel as soon and IF that 0.6000 barrier falls on quarterly close basis.
summary: buy the deeps carefully, be patient until 2021 highs will get taken. investment it is, not a trade!
just my analysis/opinion, nothing more than that, nothing less than that. can be dead wrong or lucky "fluky" right
good luck
Note
so far, so good...can move stops into the money and lock some gains.
we may get chances to refill lower than current @ 0.6975
good luck further
Trade active
longs within the 0.6350/0.6450 cluster are okay for now...seems it is a good chance to load and hold some within that cluster.
good luck
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