Kiwi ETF Looks Poised For More Losses

Declining risk appetite can be a positive catalyst for certain currencies, namely the U.S. Dollar and the Japanese Yen. On the other hand, risk aversion can punish more speculative such as the New Zealand Dollar.

Also known as the "kiwi," the New Zealand Dollar has been whacked on the European sovereign debt woes but stabilized a bit during the Sydney trading session on Tuesday. Stabilized near a five-month low that is.

This bearish trend makes looking at the WisdomTree Dreyfus New Zealand Dollar ETF (NYSE: BNZ) from the short side a compelling idea. BNZ is already down 5% year-to-date and any remotely positive news out of Greece could temporarily renew risk appetite, so playing BNZ from the short side needs to be done with caution.

After closing at $21.40 on Monday, BNZ is flirting with its 200-day moving, which may act as support, but a break of that level could take the ETF to $20. If you'd like to get in right away, that's OK, but set a stop at $22.20 for protection.