Last night there was a magnitude 7.5 earthquake on the New Zealand South Island, just north of Christchurch. With two people dead, it left behind massive damage to several major NZ cities and even caused tsunami warnings across the east coast of the island nation.
As tragic as a disaster like this may be, as we’ve seen from the way life goes on in Paris, markets don’t actually move on them like they used to…
Talking about world events in this way may seem immoral to some, but it is the reality of the game we are in.
The already under pressure New Zealand Dollar continues to slide past its lowest levels in more than a month, so lets take a look at the chart and see what we’ve got approaching:
Ask yourself, has anything really fundamentally changed for New Zealand? No.
So with Kiwi in the position it is at daily support, zooming into an intra-day chart to look for lower time frame re-tests of short term support is one strategy that could be employed if you’re happy to fade any early Asian session panic weakness.
As I’m typing this, I can see the downward momentum steaming through the market. In a market that is being driven by momentum moves, you don’t want to be trying to catch a falling knife. Avoiding this type of situation is why traders wait for higher time frame support to hold (the daily level above) and then trade around an intra-day level that allows excellent risk:reward.
Getting this confirmation is a key aspect in keeping your trading low risk and high reward. Keep an eye out on the @VantageFX Twitter account for intra-day NZD/USD levels as they unfold.
Best of probabilities in your trading this week!
JPY Prelim GDP q/q
CNY Industrial Production y/y
This is a guest post originally appeared on Vantage FX. Reposted with permission.