From the desk of Steven Strazza @Sstrazza and Ian Culley @IanCulley
Two months ago, we laid out plans to position ourselves for a push higher in the USD.
Of the four trade setups we identified–EUR/USD, GBP/USD, AUD/USD, and NZD/USD–the Aussie was the only one that worked.
The fact that many of those trades failed or, more specifically, were never even triggered at all, is information!
Fast forward to today and we’re looking at a failed breakout in the US Dollar Index that’s been confirmed by strong downside follow-through since last week. Now, it’s time to flip the book long on some of these trades to express our thesis of further USD weakness, at least over the near term.
One trade setup that stands out due to its asymmetric risk-reward profile at current levels is the NZD/USD.
Let’s take a look at the Kiwi…