Yep, this one’s still open, fellas! I may have entered a wee bit too early on this short NZD/CAD position but it looks like the long-term resistance is still holding. If you’re wondering what I’m talking about, make sure you read my initial trade idea first.
I thought I already missed the test of the .9550 long-term range resistance so I tried to catch the selloff on a break of a short-term trend line. As it turns out, Kiwi bulls had enough energy for another test of resistance even after the RBNZ decided to cut interest rates.
Now that Governor Wheeler has kept the door open for additional rate cuts in hopes of spurring some Kiwi weakness, I’m inclined to keep this short position open. Besides, the oil-related Loonie seems to be getting some support from upbeat remarks from OPEC officials ahead of their meeting next month. According to Saudi Arabia’s energy minister, they might even discuss potential actions that could be necessary to stabilize prices.
From a technical standpoint, price seems to be forming a tiny double top pattern and breaking below the neckline at .9350, possibly sending the pair lower until my entry area. I’ll reevaluate whether I should hold on to this position around the .9200 levels or just exit early by then.
For now, I’m watching Kiwi price action closely after the upbeat quarterly retail sales release from New Zealand, but it seems as though bulls are unimpressed by the latest figures. I’ll keep y’all posted on my trade decisions through my Twitter account!
As always, don’t risk more than 1% of your account on a single trade and make sure you read our risk disclosure if you’re thinking of taking the same setups.