Trade Adjustments: NZD/CAD Uptrend Pullback

Finally some bullish movement on my NZD/CAD trade! I’m gonna make these risk adjustments to protect my account from potential volatility with the OPEC meeting coming up.

Long NZD/CAD Trade

I bought this pair around the 61.8% Fib a couple of weeks back, thinking that it would be strong enough to hold as support since it coincided with a former resistance area. However, price dipped a little lower so I held my breath as it came close to my stop below the .9400 handle.

Fortunately, more buyers hopped in around the psychological support area and the rising trend line when talks among OPEC leaders seemed to break down ahead of their official gathering in Vienna today. As Pip Diddy mentioned in his U.S. session recap, Iran is stubbornly refusing to cooperate and would rather freeze output at higher levels than what the OPEC is proposing.

Because of that, an output deal seems highly unlikely for now, but who knows how things could turn out during the actual meeting? Some say that energy ministers could still scramble to come up with any kind of agreement, even if it involves flexible output levels or a vague timeline, just to prevent crude oil from plummeting in disappointment.

NZD/CAD 4-hour Forex Chart

NZD/CAD 4-hour Forex Chart

I’ve decided to roll my stop up to entry in order to shield my account from any losses in case the energy ministers do agree on something and cause oil prices to surge. I’m keeping my profit target near the .9900 handle or the swing high, which might be the next ceiling if the OPEC talks end without a deal.

Earlier today, the RBNZ released its Financial Stability Report which contained mostly upbeat remarks on the housing sector, as Governor Wheeler mentioned an “encouraging drop” in mortgage lending that eases fears of a property bubble. He also projected that the annual CPI could be back in their target range by next month, which suggests that they won’t need to cut interest rates anytime soon.

Up ahead, Canada’s monthly GDP reading is also up for release, along with a couple of underlying inflation figures. Still, I think all eyes and ears could be on the outcome of the OPEC meeting today so I’m reducing my exposure with this risk-free trade.

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See also: Q3 2016 Trading Performance Review

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