Watchlist: NZD/CHF Long Setup

Watchlist: NZD/CHF Long Setup

NZD/CHF hits my watchlist for a potential pop in volatility from the upcoming Reserve Bank of New Zealand’s latest monetary policy statement.

Will we get dovish rhetoric to sent the Kiwi lower, or will the most recent data and outlook have the RBNZ feeling like they could hold off on further stimulus actions?

NZD/CHF Long Setup

NZD/CHF 4-Hour Forex Chart
NZD/CHF 4-Hour Forex Chart

This week, I’m watching the latest monetary policy statement coming soon from the Reserve Bank of New Zealand (May 13, 2:00 am GMT) for a potential long play in the Kiwi dollar.

Recent economic data from New Zealand has been relatively better (e.g., New Zealand Q1 employment up 0.7% vs. projected 0.2% drop) and it looks like NZ has done a great job of beating the coronavirus, enough so to end their lockdown last week.

New Zealand is not obviously out of the woods yet, but I’m thinking we’re not going to see an overly dovish statements and/or further stimulative actions from the RBNZ later.

This could continue to be beneficial for Kiwi bulls if this does indeed play out, and I’ll look to get long in some Kiwi’s, especially if positive risk-on vibes persist off of the main story of economies easing on their lockdowns.

But first, I think there’s a chance of a pullback in the Kiwi around the event (profit-taking after its recent strength?), and if that occurs and the scenario above plays out, then I’ll look to enter into a long position.

My target entry will be the rising ‘lows’ area, marked on the four-hour chart above of NZD/CHF, to play the uptrend on the pair. I’m not going to enter orders at the moment and wait for the statement to come out first, and if there is a pullback, then I’ll look to enter buy orders if the idea still makes sense.

That’s it for now. Stay tuned for updates and as always, remember to never risk more than 1% of a trading account on any single trade. Adjust position sizes accordingly. Create your own ideas and don’t simply follow what I do.

  NZD Weekly Forecast (Mar. 2 – 6)

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