The market showed a piece of over reaction yesterday after the rate statement from RBNZ, but we really didn't do anything than go up to sell from better levels. What do we think can bring NZD above fair value? (probably need a rate hike) This is how I look at it. We only tested the highs again by means of a nice spike that might have taken out some traders that went in short before structure confirmed it. I'm not saying it can't go higher because I've seen many things over the year that don't make sense. 'The market priced in the 25bp cut already? That is nonsense when it comes to an explanation. This might be nice for the newspapers but if it is already priced in why go against what you already priced in without any change of what you already priced in? Exactly no reason besides sell at better levels. So what is the plan? Same as always lets wait for the first impulse which might currently be in progress and sell the continuation. Just a note we are trading below last weeks highs at the moment (0.72560) and I like to see a close below this level this week as well. This way market dynamic also points us in the direction of a bearish momentum to be next. The RBNZ will follow;-)
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