Aussie/Kiwi spread: Cancel the Buy Order For Now

Australian Dollar/New Zealand Dollar Spread

About two months ago, the Australian dollar/New Zealand dollar spread reversed off of a fifteen-year low and closed above the declining 50-day Moving Average for the first time since early November. This triggered a bullish trend change. In response, the IMC blog put out a hypothetical trade alert to go long on a small pullback to the 50-day MA and a Fibonacci .382 retracement.

Australian Dollar New Zealand Dollar spread (continuous) daily

Australian Dollar New Zealand Dollar spread (continuous) daily

In hindsight, waiting for a small pullback was a bad idea. The spread did not quite reach our entry level. Instead, it rocketed several hundred basis-points higher for the next several weeks. At the June 23rd seven and a half month high of almost nine cents (premium Aussie), the Australian dollar/New Zealand dollar spread has left us in the dust.

Since our initial entry level is now so far away, it seems that the prudent thing to do right now is to simply cancel the order and keep this spread on the watch list.

Trade Strategy:

Cancel the hypothetical order to buy one September Australian dollar/New Zealand dollar spread at 2.60 cents (premium Aussie).

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