AUDNZD - The thin end of the wedge

Firstly sorry for the lack of updates I have been very busy indeed.

As returning readers will know I have been touting AUDNZD longs since this blog began. As time passes I feel that this is shaping up to be quite a decent macro trade. Unfortunately my trade suggestion did not get filled for those that placed orders, however, it was well intended. As I hope you are all aware S&P, for what they are worth, have warned that they may cut New Zealands foreign currency rating. On top of that business confidence has hit a fresh 34 year low.

Although the business confidence figures are not unique to New Zealand, the S&P attention highlights just how shallow the New Zealand economy is when compared with Australia. This will simply increase the rate at which capital will leave the country and accentuate the funding problems that the country may be beginning to face.

I will try and provide a technical update at the end of the week, but lets just say that we are on track to re-test the old 2008 high from last July and with that the potential of the wedge break just increases. Once out of the wedge the trade becomes a monster. It is by no means too late to contemplate getting in on pullbacks. Again, I will try and provide some direction on that front, but it will have to be later, probably over the weekend.....