So now that Donald J. Trump is the president elect, things are not going to be the same again. Just like Brexit, this came as a shocker for most analyst and political commentators. Votes started trickling in late in the NY session and through the Asian session and well, Donald led throughout the vote tallying session till he was declared the winner of this electorate process. This meant that the USD lost almost 4%, Gold jumped and peaked at about 800 pips as flight for capital kicked in, S&P 500 and Dow dropping like a stone from their current highs while the MXN shaded about 14% of its value. Interestingly, the NZD despite the USD weakness continued to slump, dropping by about 100 pips and trading at around 0.729 by end of Asian Session. On the other hand, the Yen, EUR and GBP pairs did well. Look to buy the GBP as you shed the NZD from your portfolio.
What’s easy to notice is that high wave formation with overbought stochastics across all NZD pairs especially the NZDCAD pair and of course the easy double bar bearish engulfing pattern in this currency pair. With RBNZ rate decision coming later today at the NY session, there is a consensus that interest rates will be slashed further back to record lows at 1.75% from the current 2%. If this happens then brace yourself for a long term bear trend keeping in mind that Donald Trump is not going to retain the current FED chair-Dr. Yellen-whom he claims works for the elite and continues to pump up the current stock market bubble. The Feds are going to raise their interest rates and with further rate cut by the RBNZ, the next stop should come at around 0.61. Which won’t be a surprise anyway as everything from Brexit to this, shocked the markets.
So today, with changed margin requirements by most stock brokers given the current volatility will be to short the NZD at all highs. Entry will be at the 15 min chart, sell with an overbought stochastics and trail your profits or trade with a risk reward ratio of 1:3 irrespective of the time frame you prefer.
Today, daily chart traders, trade as follows:
Sell Limit: 0.73
Stop Loss: 0.74
TP: 0.7 or trail your profits with a 60 pips trailing stops.
For day traders, entry in the 15 min chart as follows:
Sell stop: 0.7290
Stop Loss: 0.734
Take Profit: 0.715
NB: look to buy the CAD today especially before Crude Oil inventories release-consensus at 1.3M from last week’s 14.4M barrels. There is a clear high wave pattern with an overbought stochastics in what was a previous false break out in the weekly chart.
Have a good trading day