NZD/USD: Shorting at a Range Top – What a Heartbreak!

Trade Update: 2013-02-15 3:28

So much for not getting my heart broken on Valentine’s Day! Just when I thought NZD/USD was headed my way after it dipped to .8460, the pair zoomed right back up as the quarterly retail sales report beat expectations.

As it turns out, consumer spending jumped by 2.1% in the last quarter of 2012, surprising many market watchers including myself. The core version posted a 1.5% increase for the period while the previous quarter’s figure enjoyed an upward revision.

NZD/USD Trade Update

The strong report eventually triggered a strong upside breakout above the .8450 resistance zone and even beyond the .8500 major psychological level. The Kiwi surged to its 5-year high against the Greenback, eventually hitting my stop at .8525.

Here’s the damage:

P/L: -55 pips/-0.50%

Just as in love, I do know that there were risks involved. Unfortunately for me, I got hurt in the end. Here’s to being able to move on and bounce back someday though!

I hope you guys had a better Heart’s Day than I did! How did your Valentine’s Day turn out?

Trade Idea: 2013-02-14 2:40

Have you ever felt so good about spotting a setup that you just want to stick to your screen and cheer it on? Well, that’s how I feel about NZD/USD’s long-term range!

If we look at the 1-hour chart we’ll see that the .8465 area has been holding as a solid range resistance since December last year. Not only that, but right now I’m also seeing a bearish divergence forming! Good thing that New Zealand’s Finance Minister gave me the opportunity to jump in.

NZD/USD .8500 Resistance

A few hours ago he stated that they aren’t interested in participating in a currency war. This inspired a mild Kiwi rally, enough to test the range resistance. See, this is why I like trading better than dating. Waiting for a good comdoll setup to materialize takes much less time and effort than looking for a great guy. I’m pretty sure other female traders could relate, too. But I digress.

As optimistic as the New Zealand officials are, I don’t think there are any game-changing factors for the Kiwi. I mean, we can’t deny that its recent reports have been printing to the downside. In fact, its retail sales data out in a couple of hours is expected to print lower after we saw a significant drop in employment during the same period.

Here’s my plan for this trade:

Shorted at .8470 with a 55-pip stop loss at .8525. My original profit target is at the bottom of the range (.8300) but I can always adjust my stop loss depending on the Kiwi’s outlook. Read the risk disclosure if you’re planning to join me!

What do you think? Will I get my heart broken by this one or not?

Happy Hearts’ Day, everyone!

Happy time

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  • chin

    this trade still works? highest closed at 0.8503.

    • happypip

      Nah, I got wiped out because of the strong retail sales figure.

  • disqus_bWXkTdTBkR

    your SL HIT

    • happypip

      Boo hoo! Dang that retail sales report was pretty strong!

  • Edmo

    Thanks Happy Pip, I love following you. I short 0.8506, good so far.

    • happypip

      Too bad the strong retail sales report stopped me out. Did you exit early?

      • Edmo

        Sad, but its part of it. Lost 55pips :( Live to trade another day :)

  • irfan hashim

    do you thing its time to buy?

    • chin

      0.8500 barrier broken. the uptrend is so strong. retracing a bit now. good time to long now?

      • happypip

        Right now I’m seeing a steep rising trend line on 4h. But it might still go down to .8400 (61.8% Fib and former consolidation).

        • irfan hashim

          thats my second target… 30+20 pips.. you will be able to average your stop earlier:-)

  • irfan hashim

    i dont things so this can be done this week as a retail saleq/q NZD expected to be very good.. then last may drag the .84 till next week.

    • happypip

      Looks like you were right about that!

      • irfan hashim

        you should like my post…

    • Mephisa

      was very good indeed

      • happypip

        Yep, stopped me out on my short trade. Too bad!

        • irfan hashim

          hehehe, you should consider news.. before opening a trade.. i will go to down but not right know… retail sales q/q was expected to be 1.6% higher but actually it was 2.1%higher which make to hit stoploss. i will recommand all guys afer G20 meeting what should be done to NZD.. and InshaAllah we will cover loss. my be your system will exactly right after G20….

  • irfan hashim

    effect of report going, now follow the happypip earlier post. im short… SL at .8540 first target at .8420

    • happypip

      Looks like your short trade worked out! Where were you able to enter? :)

      • irfan hashim

        HERE IS MY PLAN.. I HAVE TAKEN MY FIRST PROFIT AND GONNA GIVE A LITTLE SCALPER AND THEN THIS BABY WILL GO TOO DOWN….. 30PIPS DONE AND WAITING FOR 20 MORE FORE LOSS OF 55PIPD:-)

  • Bijoymj

    All the Best. Though the price went up to 0.8515, now it is signals like retracing. Good Luck and Good Trading

    • happypip

      Oh man, I thought so too! Until the retail sales report came out and blew me right out of this trade.