EUR/NZD may have popped higher after New Zealand’s dairy auction this week, but I’m not too worried about my short forex trade yet. In fact, this could be my chance to add to my position!
As I mentioned in my latest set of trade updates, I have already adjusted my stop to entry for my initial position on this trade, before price eventually moved in my favor. The pair dipped to the 1.4300 major psychological support before showing another forex retracement setup.
The descending trend line on EUR/NZD’s 4-hour forex chart is still intact and, as Big Pippin showed in today’s Chart Art, the pair seems to be pulling back to an area of interest near the 50% Fibonacci retracement level. In addition, a neat bearish divergence can be seen, with stochastic making higher highs and price forming lower highs.
I’m considering shorting around the 1.4550 minor psychological level and setting my stop at the 1.4700 handle once stochastic starts moving lower. I’ll be aiming for new lows once more, although I will adjust my stop when price starts testing the previous lows at 1.4300.
Do you think that I should add to my short EUR/NZD position? Or is this a bad idea? As always, I value your feedback!
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