THE long sterling-New Zealand dollar position has already proven to be profitable, and it looks as though we could start to see an acceleration of gains following the latest surge beyond NZ$2.0700. The fundamentals have certainly been supportive, with a dovish central bank, problems with local fruit, and a ratings downgrade all helping to strengthen the bullish outlook. As such, we will now look to take advantage of the latest rally and mitigate risk on the trade. A decent target might be NZ$2.5000. IG Markets offers a spread on sterling-New Zealand dollar NZ$2.07150-NZ$2.07309.
And just as the Kiwi is falling, so too is the Aussie. Traders have been watching the Australian dollar-US dollar pairing very closely as it appears to be forming a clear head and shoulders pattern with the move lower yesterday. Late yesterday it was breaking the neckline at around $0.9737. With the head at $1.0170, a break of the neckline suggests a possible fall to the measured-move objective of $0.9290. Spread Co offers a spread on Aussie-US dollar of $0.9726–$0.9728.
The euro is looking stressed as well. With sovereign debt fears about Ireland continuing, stability is unlikely to reappear any time soon. If the panic spreads east from the emerald isle, then things could get a lot worse. Against the dollar, the euro recently dipped below its 20 and 50 day moving averages, and the two currencies have crossed to enforce the bearish signal. Capital Spreads quotes a price of $1.3550-$1.3551 on the euro-dollar.
And if the Eurozone crisis wasn’t enough, North Korea seems to be doing its very best to unsettle the entire world. Safe haven currencies might be especially likely to do well then – with lots to be scared about, where better is there to squirrel away money than safe, neutral Switzerland? The possible upside on euro-Swiss franc is probably limited, while a break below €1.3265 could signal further euro losses to come. CMC Markets offers a spread on the euro-Swiss franc of €1.33278-€1.33308.