May 20


1. Long NZDJPY @86’90 Stop Loss 84’50 Take Profit 88’70.

2. Long NZDJPY @85’30 Stop Loss 84’50 Take Profit 86’40.

Justification: Favorable interest rate differentials for long positions. RBNZ is expected to raise rates over next few months while BoJ would maintain a near zero rate. BoJ’s QE continues. Seasonally, May is a bad month for NZD and we are taking this as an opportunity to build NZD longs. Technically, the entry level is at the support confluence of 100DMA and channel resistance.

Risk: RBNZ will intervene in the market by selling NZD, if it is appreciated excessively.

Note: If the price closes below the 100DMA (i.e below 86.77 today), cover half position. Stop Loss will be activated on a daily close basis below 84.50 only.