Trade Update: 2011-01-25 1:48
Dollar weakness, combined with a hawkish RBA statement, pushed NZD/USD above the .7800 area and hit my original stop at .7825. Good thing I was out of the trade early, at .7761, because I used a trailing stop on this short trade.
Phew! I’m still a bit disappointed though since my trade was already up by more than 60 pips before the pair started to pull up from its drop. I probably should’ve locked in some of my winnings at the closest psychological level (.7700) instead of being very ambitious and putting my first PT at .7600.
Hmm, I probably should reduce my girls’ nights out too, so I’ll have more time to watch my charts. Uh-oh, how am I gonna break it to my girls?
Anyway, here’s how my trade turned out:
P/L: -11 pips / -0.15%
Crossing my fingers that my next trades bring me pips!
Trade Idea: 2011-01-26 3:02
Yesterday the Greenback lost some of its shine on a bit of risk appetite in the euro zone and the not-so cool housing data in the US, but judging from the recent reports, I think that it won’t take long before fundamentals weigh on the Kiwi.
For one, my friends are telling me that the big FOMC statement due a few hours from now would be good for the dollar. This is probably because the U.S. has been showing positive economic results for the past few weeks, and there’s a good chance that the Fed will become more optimistic on the economy.
On the other side of the baking sheet, analysts are expecting gloomy thoughts from the Reserve Bank of New Zealand. Aside from threats of China implementing more tightening on its economy, a lot of investors think that the effects of all the flooding in Australia will spill on New Zealand, its close trading partner. The comdoll connection might weigh on the New Zealand economy, and would most likely keep the RBNZ from raising interest rates.
I plan on playing the falling channel that Big Pippin pointed out on the 4-hour chart today, so I set my short order at .7750, which is right at the top of the channel. I put my stop loss at .7825 because it’s above the previous week’s high and the psychological .7800 handle.
Stochastic is at the overbought area right now, which means that the hungry Kiwi bears’ stomachs are grumbling. However, I figured the upcoming FOMC and RBNZ statement could provide enough volatility to push the pair to my entry price before sliding back down.
Then, I put my first profit target at .7600, not just because it’s an area of resistance, but it’s also right around the middle of the channel. Plus, I noticed that the rising trend line on the daily chart is still holding and could act as support for the pair. Lastly, my second profit target is placed at .7500 near the bottom of the channel.
Here’s my recipe for pips: