Update: NZD as Leading Indicator for Carry Trades

Date August 28, 2007

Yesterday, I talked about how there was a strong reversal formation in the New Zealand dollar which could be used as a leading indicator for carry trades (see post and chart). Today, the reversal continues to unfold with the NZD/USD moving back towards its sell zone (1-2 Bollinger Bands).

Keep watching this pair as it could continue to foreshadow moves in the yen crosses. Dow futures are already down sharply before the US equity market open. If the New Zealand dollar manages to break back below 0.7045, expect carry trades to follow suit with USD/JPY tumbling back below 115.

More on this topic (What's this?)
The Future of the NZD. (Forex Trading TV Video Blog, 4/25/07)
Small Risk Rally This Week? (USD, AUS, NZD) (Wall Street Sector Selector, 11/28/11)
Cullen Says Hedge Funds May Be Behind New Zealand Dollar Surge (Hedge Fund Blogs From HedgeCo.Net, 9/26/06)
Read more on New Zealand Dollar (NZD) at Wikinvest

Category Posted in Carry Trades, Dow, Forex News, Forex Technicals, Japanese Yen, New Zealand dollar

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