Forex Trade Update: GBP/NZD Falling Wedge

And I’m in! Thanks to the RBNZ rate cut decision, my short forex order at the top of GBP/NZD’s falling wedge got triggered. In case you’re just tuning in, make sure you check out my initial trade idea here. Should I keep this open?

Price hasn’t filled its gap after last week’s RBNZ statement but we’ve got a bunch of top-tier catalysts lined up from the U.K. and New Zealand this week that might lead to more volatility.

GBP/NZD 1-hour Forex Chart

GBP/NZD 1-hour Forex Chart

The claimant count change report is due tomorrow and analysts are expecting to see a smaller reduction in joblessness of 8.8K compared to the previous 14.8K drop. Meanwhile, the average earnings index could see an improvement from 1.9% to 2.0% but subdued wage growth could still weigh on the pound. Later on, the BOE will announce its monetary policy decision and might maintain its downbeat outlook.

As for New Zealand, the economy is set to print its quarterly GDP reading mid-week and might show a 0.7% growth figure. The Global Dairy Trade auction is also coming right up and if the dairy industry shows momentum from the previous bounce, the Kiwi might be in for some gains.

For now, here’s what I’ve got:

Short GBP/NZD at 2.1475, stop loss at 2.2025, PT at 2.0675 for a potential 1.16-to-1 return-on-risk.

I’ll be ready to close early if the market events don’t go my way in the next few days. I risked 0.5% of my account on this forex setup so make sure you check out our risk disclosure if you’re joining me!

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