As I’ve mentioned in my Twitter update earlier, I’ve decided to exit my NZD/USD long trade ahead of the FOMC statement and RBNZ interest rate decision. Before reading on, don’t forget to take a look at my initial trade idea.
Price seemed ready to make a downside break from the rising channel support ahead of the central bank announcements so I thought it best to just reduce my exposure to event risks. Besides, I was expecting additional volatility then and the pair was also nearing my stop loss.
I was able to close early at .6875, effectively cutting my losses in half before price hit my stop (.6825) during the FOMC announcement. It looks like the support area is still holding for now, though, and in hindsight it seems that I may have entered a long position too early. Here’s what happened:
P/L: -50 pips / -0.25%
Given the pair’s reaction to the RBNZ decision and the potential USD selloff on the lack of June rate hike hints, I’m thinking that the uptrend could carry on. I’m still considering entering again right at this long-term channel support, but I’ll probably wait until early next week. What do you guys think?
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