11 Jun 2015
Positioning signals being cautious on NZD/USD short trades – BNPP
FXStreet (Barcelona) - The FX Strategy Team at BNP Paribas, explains that their positioning analysis suggests the NZD shorts remain very large and some profit taking might be on the cards, hence suggest adopting a cautious bias on kiwi short trades.
Key Quotes
“The RBNZ opted to cut rates by 25bp last night and also signaled that further easing may be appropriate. Market expectations were very finely balanced ahead of the decision, leading to a large knee-jerk response in the currency – NZDUSD has fallen 2.5% and we have been taken out of our short AUDNZD trade recommendation for a 1.5% loss.”
“NZDUSD has so far held above key physiological support at 0.70. Meanwhile, our positioning analysis signals being cautious about entering short NZD positions following the recent move. Short NZD positioning appears very large (score of -38 out of -50), suggesting that there is plenty of scope for profit taking following the move.”
“In a broader context we think the RBNZ’s move questions rate expectations for other commodity exporters such as Canada and Australia where markets have priced out rate cuts for the balance of the year.”
Key Quotes
“The RBNZ opted to cut rates by 25bp last night and also signaled that further easing may be appropriate. Market expectations were very finely balanced ahead of the decision, leading to a large knee-jerk response in the currency – NZDUSD has fallen 2.5% and we have been taken out of our short AUDNZD trade recommendation for a 1.5% loss.”
“NZDUSD has so far held above key physiological support at 0.70. Meanwhile, our positioning analysis signals being cautious about entering short NZD positions following the recent move. Short NZD positioning appears very large (score of -38 out of -50), suggesting that there is plenty of scope for profit taking following the move.”
“In a broader context we think the RBNZ’s move questions rate expectations for other commodity exporters such as Canada and Australia where markets have priced out rate cuts for the balance of the year.”