Early in the Asia session, I decided to close out my short GBP/USD and NZD/USD forex trades to avoid the upcoming event risk with the U.S. non-farm payrolls coming in the U.S. session. Here’s a quick review.
Original Trade Idea: Resistance on GBP/USD at Previous Consolidation Area?
Looks like I caught a bit of luck on my Cable short position as the major psychological handle of 1.5500 held nicely and we saw broad British pound weakness on weak services PMI data this week. With the pair up over 200 pips in profit, I decided to close trade down because there’s a chance that the U.S. non-farm payrolls number could disappoint thanks to the extreme weather conditions in the U.S. in February. And from the technical analysis perspective, the area of previous interest around 1.5200 – 1.5250 seems to be drawing in buy orders, and the market looks oversold based on the stochastic indicator. With that, I closed the trade down manually by buying at market (1.5236) during the morning Asia session.
Total: +264 pips/ +0.67% gain
Overall, this trade went smoothly as the previous area of interest between 1.5500 – 1.5700 held as resistance and drew in sellers for a couple hundreds of pips. And even though I’m out now, I’m still bearish on the pair and will look to re-enter short as I think the potential for the FOMC to raise interest rates in the U.S. still makes the Greenback a good place to be long.
Original Trade Idea: Simple Fibonacci Forex Setup on NZD/USD
Since my original trade idea, the chart on NZD/USD has changed from a trend pullback trade opportunity into a consolidation pattern setup as the market has stayed between .7400 – .7600 for a lot February. And because of broad Kiwi strength, I didn’t execute my short orders at .7600, which turned out to be a mistake as that level held not once, but twice to push the market back to the mid .7400’s.
I don’t know if this could be a new trend higher in the works, but with NFP coming up on the forex calendar, I decided to not find out with the potential for Greenback weakness and while I can get out for near break even. I closed the trade manually at .7487 for an almost negligible loss to my account:
Total: -2 pips/ -0.04% loss
Had I kept on my short orders at .7600, this trade could have ended up as a winner, but I think it was the right decision because of how the Kiwi was resilient against the majors in recent weeks. I couldn’t find an exact reason why it was happening, and usually when I don’t understand moves, I’ve found that it’s best to get out until I do.
Overall, not a bad haul of profit on my Dollar long bias, when including my recent USD/CAD long winner, and I’ve got one position left in the books (short AUD/NZD) that still looks good as the trend remains in tact with 1.0400 – 1.0500 still drawing in sellers at the moment. That’s it for now as I await the U.S. Non-Farm Payroll numbers and U.S. unemployment rate data. Once we see what we get and how the markets react, I can see if my long USD bias is still valid and start planning for my next set of currency trades. Stay tuned by following me on Twitter and Facebook!