My decision to stop-and-reverse on GBP/NZD worked out nicely, but it looks like 2.35 continues to be strong support. With NFP & the weekend coming up, decided to close and take profits.
Original Trade Idea: Forex Trade Idea: GBP/NZD Long
It looks like it was a good call to reverse my position as the British pound weakness continued. Plus, we just had a shot of positive sentiment for risk and the comdolls after China PMI beats in September. Unfortunately, the momentum came to a halt when GBP/NZD ran into the major psychological level of 2.3500, where the pair bounce mightily back to the 2.36 handle. With the NFP report coming up to potentially influence broad risk sentiment, and to avoid weekend risk, I closed my position manually at 2.3617 to lock in a small profit.
Long position: -80 pips
Short position: +303 pips
Total: +223 pips/+0.34% gain
With a little luck, I managed to turn a loser into a winner, which goes to show that flexibility to the changing market conditions can work out. Overall, I’m still bearish on the pair for now, but I will wait until next week before coming up with my next move on GBP/NZD. Until then, trade safe and have a great weekend!