Notes for Thursday


CYCLICAL LOWS - I'm writing this update just after the European market close on Wednesday and am staring at an AUDNZD position trading at fresh 2016 lows below 1.0250. I've been wanting to see how this market behaves in the 1.0200s and fear if we establish a daily close below 1.0200, it could result in a retest of that monumental low just over parity from 2015. But the fact is, this market continues to also trade at longer term cyclical lows and is overextended in a way that warrants a major bullish reversal. 

A LITTLE MORE PAIN - As I write this report, New Zealand GDP has yet to come out and Aussie employment is also on tap. So this very well could be a big day for the cross rate. Whatever the results of today's data, it really doesn't change my bullish outlook. But the question now is just how much more pain I am willing to take before stepping aside? The answer is a little more pain. I reduced exposure earlier this week and would ideally like to see the market hold above 1.0200 on a daily close basis. I am currently long 1.0350...so not too far off. But we do need to see that initial reversal day. 

Every good trade starts with one simple move in the right direction. Via @joelkruger

CONFIDENT - When a market trades down to levels like it is now with AUDNZD, and when a market is tracking oversold like it is now with AUDNZD, it's only a matter of time before that correction takes hold. I would very much like to be there, but will have to reassess if we close below 1.0200. Until then, I remain optimistic. Who knows? Maybe when you are reading this, AUDNZD is trading back above 1.0300 and looking a whole lot prettier than at the time I wrote this piece. Let's see how it all plays out. I will say this. I will be happy to increase exposure on this one as it moves in our favor.

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