Forex Adjustment: EUR/NZD and AUD/JPY

Got another potential catalyst for forex market sentiment with tomorrow’s NFP numbers, so I decided to lock in profits on my EUR/NZD & AUD/JPY trades.

Short EUR/NZD

Original Trade Idea: Forex Trade Idea: EUR/NZD Falling Trendline

EUR/NZD 4-Hour Forex Chart

EUR/NZD 4-Hour Forex Chart

My EUR/NZD short at the falling trendline has played out nicely so far, which I may have to credit to Fed Chair Janet Yellen for setting the record straight on recent U.S. monetary policy speculation, bringing another round of risk-on sentiment across the global markets. But there has been a pullback since hitting lows around 1.6266, so it’s time to make some adjustments to prevent this winner into turn into a loser by creating a “risk-free” trade.

Closed short order at 1.6900 and rolled down my stop to open position to 1.6575 to lock in a tiny gain. 

This adjustment gives me an easier time sleeping at night by removing fear of loss while keeping the option open for a big downside run if risk sentiment continues to be bullish, the euro gets beaten lower, or the Kiwi goes on a monster rally. Maybe all three?

If it does continue to go my way, I’ll definitely look to add a small position on a break below that recent swing low, but I’ll wait until after the NFP report to assess the market reaction and make that decision.

Long AUD/JPY

Original Trade Idea: Forex Trade Idea: AUD/JPY Trendline Break

AUD/JPY 4-Hour Forex Chart

AUD/JPY 4-Hour Forex Chart

Since my last update of removing orders, rolling up stops and adding additional entry orders, AUD/JPY bulls have been held off by the major resistance area around the major psychological level of 86.00.  In fact, we can see that the sellers were ready to jump on the buyers, shown by the “shooting starish” bear candles during the latest retest of the area.

With NFP coming up, I decided to reduce risk, lock in profits, and take advantage of an upside move if it happens.  Here’s what I did:

Closed my open half position manually on AUD/JPY at 86.27: 

Total: +122 pips/ +0.14% gain on 0.50% risk

And I am leaving my long quarter position order at 86.75, max stop at 85.05, max profit target at 90.50 in case there is an upside breakout. 

This pretty much reduces my total risk down to 0.11% if this remaining order is triggered and reverses back lower to my stop, still making this a very attractive reword-to-risk play.

What do you think of my adjustments? Too conservative? Not conservative enough? Let me know in the comments section below!