by Janko N, February 1, 2021
by Janko Nikolic February 1, 2021
NZD/JPY
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Long
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H4
Table of Contents
H4
Fundamental
The reflation trade narrative supports NZD. No further easing is expected from RBNZ in the future. The recent pullback in the risk tone is a good opportunity to re-engage in the medium term.
Long at 75.20, stop 74.80 Target 76.80
Risking 1%
Any negative news on the vaccine front as well as the US stimulus bill that could trigger the risk-off tone. Sell off in the equity space.
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The current risk to the upside is USD strength. If that continues we could see some headwinds.
I like your reading and the price formation.
What do you mean by “sell off in the equity space”?
Hi Saul,
What I mean by that is if there is some more downward pressure in equity indices like S&P, DAX, ASX. So far the indices are recovering slowly, which is helping the risk tone, hence NZD, AUD.
Also, the VIX index is one to watch, it would be ideal to see VIX in the 21-25 range.
So sell-off in equity space will invalidate the trade Idea, but it will give us a better price to buy at a later stage if all the fundamental reasons stay the same.
NIce idea ! I am in the direction ! but for me I would like to have this price action on H1, it would be ideally and fit with your idea 🙂 let see how will react the market
The deeper pullback is not excluded. It will give us the chance to buy at a better price. Let’s hope for the best. Good Luck.