This news has given us an opportunity to go Long NZDUSD while Shorting AUDUSD . The current spread is approximately 120 Pips on the hourly chart. In the past week any time we've seen a spread widen to 100 or more pips it eventually narrows back to 0 pips as the pairs come back into correlation with each other. The pairs have been 70% - 90% correlated during the past year, depending on the timeframe you analyze.
Our algorithm is currently an 82% chance AUDUSD pulls in while giving us an 65% chance that NZDUSD rebounds in price.
Please keep in mind this is not the same as entering into a Short AUDNZD position as one must account for the third economy introduced in this correlation position, the US Dollar . The US economy (therefore the US Dollar ) may react to the New Zealand numbers differently than the Australian economy.
Also keep in mind, a correlation trade greatly reduces our DIRECTIONAL RISK. To us it really doesn't matter if we are right or wrong, which way the pairs move, because ounce the correlation narrows and gets back on track close to 70% - 90% we will have a nice profit on our hands.
Here at Unique Forex we combine our team's 40+ years of trading experience with our proprietary algorithm to significantly enhance the trading experience. Utilizing the two, we are able to offer some of the most powerful research on an array of currency pairs. Here you will get all of our research on some of the more popular majors like the EURUSD , but if you would like to get access to the rest of our research head over to http://www.unique4xpro.com/research.html.