Closed EUR/AUD & NZD/CHF

Forex Trade Review: 2014-08-25

With the picture changing on a couple of my charts and the end of summer quickly approaching, I thought it was time to flatten out and re-evaluate the currency markets to prepare for new opportunities. But first, here are my reviews on EUR/AUD and NZD/CHF.

Long NZD/CHF

Last Trade Update: Entry Adjustment On NZD/CHF

NZD/CHF 4 Hour Forex Chart

NZD/CHF 4 Hour Forex Chart

I’ve had this trade on for quite a while now, and it really didn’t go much of anywhere for the past month. It looks like the sentiment turned on the Kiwi Dollar as recent weak NZ data was taken by forex traders that there wasn’t a reason for New Zealand to outperform its peers at this time. And with the RBNZ signaling no rate hikes for a while, that was enough for some to let go of their long bias.

I’ve turned into one of those traders as it seems like every time NZD made a push higher, there were was a wall of sell orders to push it back down, and in the case of NZD/CHF, that was the .7700 level. Sure, the .7650 area seems to be holding as support, but the price action for now tells me sellers are still in control and that I should step back from a long position–at least for now. I closed manually at .7632 this morning.

First half: -118 pips
Second half: -68 pips
Total: -93 pips (average)/ -0.62%

I still think the longer-term picture is bullish for NZD/CHF and that the fundamental bias should go towards NZD, but I may just be really, really early on this one. Will continue to watch and see how this behaves in September, which may be different once liquidity comes back to the markets.

Short EUR/AUD

Last Trade Update:Locking in Some Pips on EUR/AUD Short

EUR/AUD 4 Hour Forex Chart

EUR/AUD 4 Hour Forex Chart

Luckily, EUR/AUD moved as I expected, helping offset the loss I took in NZD/CHF. Weak European sentiment seems to have increased as the summer rolled along, culminating in deflationary risk comments from ECB President Mario Draghi last week. This lead to traders to believe and price in some form of quantitative easing is still on the table, pushing the euro down across the board and moving EUR/AUD all the way to the major support level I highlighted in my original EUR/AUD short trade idea.

Unfortunately, the market was there only briefly, and apparently not close enough to trigger my max profit target at 1.4150. With the market bouncing higher back above 1.4200, I decided that the run might be over, especially as we close out the summer trading environment this week, so I closed my position manually at market (1.4209).

Total: +241 pips/ +1.20% gain

I’m still short bias on the pair and watching for a retest of the next broken support area around 1.4275 for bearish candlestick formations to possibly re-enter short.

Overall, I ended up positive thanks to the run lower in EUR/AUD, and also on the positive carry I collected from both pair from holding them so long. For the rest of the week, I’ll be working on developing new trade ideas for what could be a change in behavior in September, when the pros–and liquidity–come back from their summer vacation. And hopefully, the volatility comes back as well because these low vol conditions are putting me to sleep!

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