Score 8.1 (out of 10): New Zealand Dollar risk of -2.9% drop next 1 month

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Insight:

New Zealand Dollar Spot indicates an interesting seasonal (monthly for August) set up. During similar occasions, New Zealand Dollar Spot had a median return of -2.9%, over the following 1 month – based on 9 historical occasions with 7 of those showing negative returns (78%). This sell signal for New Zealand Dollar Spot received a high score of 8.1 (out of 10).

Details:

NameNZD Spot
ViewDown
Star (1 to 10)8.1
Target-2.9%
Time1 months
Hit Rate78%

Returns during similar periods:

The chart above shows the previous returns (in %) based on similar setups with the most recent ‘insight’ shown under (1), the second most recent ‘insight’ shown under (2), etc. 

Previous episodes:

1.6% (August-2020), -3.6% (August-2019), -2.9% (August-2018), -4.5% (August-2017), 0.7% (August-2016), -3.8% (August-2015), -1.6% (August-2014), -3.2% (August-2013), -0.6% (August-2012)

How have we arrived at this insight:

The conditions that led to similar insights previously have just been triggered in the market, making this ‘insight’ relevant right now.

While sorting through the mountains of data, our data engine detected a statistically relevant historical relationship between this ‘insight’ and the asset. Our data engine aims to optimize between statistical relevant relationships (high accuracy), situations that are relevant right now (entry timing) and ideal trade horizon (exit timing).

Based on the statistical significance of previous returns in similar situations, a high score indicates a more statistically relevant expected ‘future’ move for this particular asset. After calculating various scenarios, we found the optimal trade horizon for this particular relationship to be 1 month

We calculate the median return for those previous situations (median is calculated by taking the ‘middle’ value, the value for which half the observations are larger and half are smaller) to determine the -2.9% estimated target return.

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