GBPNZD: Volume, Chart Pattern and Central Bank Reflections
Pattern Analysis:
Cup-with-Handle Pattern slowly accumulating power and strength into a multi-weekly and multi-quarterly rally.
Volume Analysis:
I have my own way of interpreting volume the way I see it, not published anywhere. I probably should write it down. Ah.. never-mind. Who really cares. haha!
But, the first blue volume arrow showed accumulation interest while the cup was forming. Then, the last blue arrow shows no interest in selling activity in the market of this exchange rate.
I have both economic-fundamental reasons and technical reasons for the rationale of this investment idea, more than what I am about to mention. So, I will provide links:
(1) On November 10, 2016, the New Zealand's central bank many call the RBNZ dropped their interest rate -0.25 to 1.75 %.
(2) On Nov 02, 2017, the United Kingdom increased their rates +0.25 to 0.50 %.
While this looks pretty dismissal from an interest rate collecting standpoint, since I am currently paying the swap, I believe that UK's currency will appreciate and hopefully, steam any swap challenges. I also believe that the UK's central bank is in the beginning of a rate hike cycle. According to my own economic-research and wild fascination in understanding what UK's central bankers are thinking, I think this is a buy and hold for now.
I read a 29 page speech by Michael Sauders, a UK central banker, that he gave on April 20, 2018. Although the GDP and retail sales came out soft, there is actually a good reason behind it. It looks great to me: pbs.twimg.com/media/...dRWAAAe1VI.jpg:large
The chart compares snow months with retail sales and GDP, the the month or two after than snow month.
The reason why retail sales where ugly was due to the "unusually heavy snow." Q1 weather in the UK; that was culprit! A lot of women were shopping online buying make-up and female products instead of going to the store, physically. Hey, it snowed here in my location too, and in the middle of April! That was quite strange.
Michael Sauders continues, " Previous experience suggests that such snow effects typically reverse in the next month or two." Well, that destroys the idea of dismal retail sales and GDP going forward. The 150 pip fall in the GBPUSD itself was a knee-jerk reaction by market participants full of trigger friendliness and trigger-happiness. they did not take the time to think and digest the whole scenario. GBPNZD remained flat, showing how strong it really is!
Michael Sauders, the central banker of UK, clearly defined what he meant by "gradually" and that he is not using any "code words" to intoxicate you or indicate anything "hidden" or "secret." The market also overreacted to Carney's, as well.
Well, these are a few of my conclusions after reading the speech.
Plan:
(1) Buy and hold the GBPNZD exchange rate for several quarters, if possible.
(2) Enjoy the appreciation of the pair until the swap starts to pay me back.
Cup-with-Handle Pattern slowly accumulating power and strength into a multi-weekly and multi-quarterly rally.
Volume Analysis:
I have my own way of interpreting volume the way I see it, not published anywhere. I probably should write it down. Ah.. never-mind. Who really cares. haha!
But, the first blue volume arrow showed accumulation interest while the cup was forming. Then, the last blue arrow shows no interest in selling activity in the market of this exchange rate.
I have both economic-fundamental reasons and technical reasons for the rationale of this investment idea, more than what I am about to mention. So, I will provide links:
(1) On November 10, 2016, the New Zealand's central bank many call the RBNZ dropped their interest rate -0.25 to 1.75 %.
(2) On Nov 02, 2017, the United Kingdom increased their rates +0.25 to 0.50 %.
While this looks pretty dismissal from an interest rate collecting standpoint, since I am currently paying the swap, I believe that UK's currency will appreciate and hopefully, steam any swap challenges. I also believe that the UK's central bank is in the beginning of a rate hike cycle. According to my own economic-research and wild fascination in understanding what UK's central bankers are thinking, I think this is a buy and hold for now.
I read a 29 page speech by Michael Sauders, a UK central banker, that he gave on April 20, 2018. Although the GDP and retail sales came out soft, there is actually a good reason behind it. It looks great to me: pbs.twimg.com/media/...dRWAAAe1VI.jpg:large
The chart compares snow months with retail sales and GDP, the the month or two after than snow month.
The reason why retail sales where ugly was due to the "unusually heavy snow." Q1 weather in the UK; that was culprit! A lot of women were shopping online buying make-up and female products instead of going to the store, physically. Hey, it snowed here in my location too, and in the middle of April! That was quite strange.
Michael Sauders continues, " Previous experience suggests that such snow effects typically reverse in the next month or two." Well, that destroys the idea of dismal retail sales and GDP going forward. The 150 pip fall in the GBPUSD itself was a knee-jerk reaction by market participants full of trigger friendliness and trigger-happiness. they did not take the time to think and digest the whole scenario. GBPNZD remained flat, showing how strong it really is!
Michael Sauders, the central banker of UK, clearly defined what he meant by "gradually" and that he is not using any "code words" to intoxicate you or indicate anything "hidden" or "secret." The market also overreacted to Carney's, as well.
Well, these are a few of my conclusions after reading the speech.
Plan:
(1) Buy and hold the GBPNZD exchange rate for several quarters, if possible.
(2) Enjoy the appreciation of the pair until the swap starts to pay me back.
Capturing the swings of the stock market & currency market. It's a dirty job and equity/currency traders must do it.
