NZD/USD Impacted With Event Risk

CHICAGO - March 12, 2014 - PRLog -- According to a Bloomberg News survey, all of the 15 economists polled see the Reserve Bank of New Zealand (RBNZ) raising the benchmark interest rate by 25bp in March, and the central bank may look to normalize monetary policy throughout 2014 as the pickup in economic activity raises the outlook for growth and inflation.

What’s Expected:

Time of release: 03/12/2014 20:00 GMT, 16:00 EDT

Primary Pair Impact: NZD/USD (http://www.dailyfx.com/nzd-usd)

Expected: 2.75%

Previous: 2.50%

DailyFX Forecast: 2.75%

Why Is This Event Important:

Indeed, RBNZ Governor Graeme Wheeler may sound a more hawkish this time around amid the ongoing threat of an asset-bubble, and interest rate decision may spur fresh highs in the New Zealand dollar should the central bank show a greater willingness to implement a series of rate hike over the coming months


How To Trade This Event Risk

Bullish NZD Trade: RBNZ Raises Rates & Pledges to Normalize Further in 2014

Need green, five-minute candle following a hawkish statement to consider a long NZDUSD trade

If market reaction favors a long trade, buy NZDUSD with two separate position

Set stop at the near-by swing low/reasonable distance from cost; look for at least 1:1 risk-to-reward

Move stop to entry on remaining position once initial target is met, set reasonable limit

Bearish NZD Trade: Governor Wheeler Disappoints & Preserves Current Policy

Need red, five-minute candle to favor a short NZD/USD trade

Implement same strategy as the bullish New Zealand dollar trade, just in opposite direction