Looks like I caught a bit of luck in EUR/NZD with the market eventually selling off after the RBNZ monetary policy decision. Now it’s time to lock in some forex profits.
Original Trade Idea: Forex Trade Idea: EUR/NZD Short
Earlier this week, I put on orders to short EUR/NZD on the idea that the Kiwi will bounce back after a pre-RBNZ-potential-rate-cut selloff. And by sheer luck, that’s what we got. The Reserve Bank of New Zealand cut the interest rate down 0.25% to 2.50%, sparking a brief rally in EUR/NZD, but as with most “buy-the-rumor, sell-the-news” scenarios, the Kiwi took off after the event, likely on profit taking and or a lack of Kiwi sellers around to extend the losses further.
Both of my orders were triggered prior to the event, and since the event, EUR/NZD has broken below my first order at 1.6300 to put me in a nice profit. And since I don’t like to give back profits, I’ve decided to lock in my gains by rolling all stops down to 1.6250 for a guaranteed 0.58:1 return-on-risk.
Today, it looks like 1.6200 may not hold with the market already breaking below that level, so I’ll keep my target wide for now, and closely monitor the trade incase the story changes and I need to make adjustments to limit my risk and/or maximize my profit. Stay tuned by following me on Twitter and Facebook!