So much for that breakout! NZD/CHF hasn’t shown much bullish follow-through so I’ve just decided to exit near breakeven and avoid exposure to weekend event risk. Make sure you review my initial trade idea before reading on.
As you can see from the pair’s daily chart below, price hasn’t moved that far away from the triangle resistance even after it made a strong upside breakout last week. This suggests that Kiwi bulls might be hesitant to charge, given the tossing and turning market sentiment these days.
Now I’m not gonna risk holding a position on a European currency over the weekend, knowing that any Brexit-related updates could lead to huge gaps by Monday. Heck, if forex brokers are deciding to play it extra safe with their own risk adjustments ahead of the EU referendum then I’m gonna be careful, too!
Besides, it looks like traders are shrugging off any updates pertaining to commodities or even reports from major economies, turning all their attention to changes in overall market sentiment instead. With that, forex market participants appear to have forgotten about the bullish vibes brought by last week’s RBNZ rate statement.
Since price was still lingering close to my entry level at .6825, I just decided to close my trade right then and there. I only gave up 10 pips on this setup for an almost negligible dent on my account. I figured I’d just wait for the Brexit dust to settle before taking on any new setups since I’m not prepared to deal with potentially unprecedented levels of volatility.
How about you guys? What’s your game plan for the upcoming EU referendum? 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!