FxWirePro call review: 2800 pips EUR/NZD bearish call

Last July, in the article named, “FxWirePro long term outlook: Euro likely to decline 2800 pips to 1.28 against Kiwi”, available at http://www.econotimes.com/, we recommended going short on the euro against the New Zealand dollar at 1.556 area with a target around 1.28.

The very first point, we would like to mention that the pair hasn’t moved as fast as expected. Instead, the EUR/GBP pair has moved much faster than our expectation towards the target. Nevertheless, we remain committed to the trade now, like we were before. The same fundamental remains active,

• Given the current circumstances, Kiwi is a better safe haven that the Euro. If the UK referendum will eventually lead to Brexit, the euro will bear the larger burden than that of the kiwi.
• Moreover, we sense that there has been a major shift in the commodities, which were the best performing asset class last year.
• In addition to that, kiwi’s exposure to essential agricultural commodities makes it and the whole country (New Zealand) a better bet over the longer horizon.
• Moreover, Reserve bank of New Zealand (RBNZ) will remain more hawkish when compared to the European Central Bank (ECB). ( we are closely monitoring for changes, there might be a change in view)
• New Zealand’s biggest weakness as of now is weaker commodities prices which we suppose will recover over time and farms will be able to reduce their break-evens in the meantime.
• Kiwi bonds offer much better yields compared to the whole of Eurozone.

Anyone, who missed the call can still enter but the risk reward wouldn’t be that great. Stop loss can be revised to 1.63 from 1.69. The call is more than 600 pips in the money.