Bah, so much for trying to catch the bearish momentum on this one! The Kiwi was able to put up a strong fight against the Loonie and steer clear of a sharp NZD/CAD drop. And now that fundamentals seem to be shifting against the Canadian dollar, I’m gonna cut my losses on this trade.
In case you missed my initial trade idea a long while back, I was actually hoping to catch a selloff from the longer-term range resistance but wound up waiting for confirmation on a short-term trend line breakdown instead. I was able to enter at .9175 so you can imagine I was a bit bummed out when NZD/CAD made another test of .9550 after all.
The long-term range resistance still seems to be holding so far, but I couldn’t help but notice that price made lower lows recently, indicating that buyers are trying to push the pair higher. To top it off, RBNZ head Wheeler’s remarks on not wanting to conduct rapid rate cuts have boosted the Kiwi earlier this week.
Also, crude oil seems to have lost the momentum in its rallies, with factors such as rising U.S. rig counts and the buildup in stockpiles also keeping a lid on the commodity’s gains. it doesn’t help that the OPEC September meeting is approaching but some member nations seem less inclined to cut production.
Because of all that, I’ve decided to just cut my losses on this short position and keep my one eye on the lookout for a much better setup. Here’s what I ended up with:
P/L: -250 pips / -0.25%
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.