Trade Update: 2013-02-01 3:45
Woohoo! I locked in my profits for this NZD/USD short-term trade when the pair started to stall around the .8400 mark. As I mentioned in my trade plan, I would watch the pair a little more closely once price hits this level, which could be the intraday resistance for NZD/USD.
What made me finally decide to exit my trade though is the weaker than expected Chinese PMI, which fell from 50.6 to 50.4 in January. I figured that this downbeat report could weigh on the riskier currencies today, which suggests that .8400 might hold as resistance for NZD/USD until the end of the week.
Here’s how my trade turned out:
P/L: +35 pips / +0.5%
Trade Idea: 2013-01-31 2:30
I can’t believe I missed trading the RBNZ’s interest rate decision!
You see, the RBNZ might have kept its rates steady at 2.50% but was more hawkish than its previous statement. The central bank believes that domestic economy is picking up and that inflation is posing no immediate threat just yet.
If we look at Forex Gump’s RBNZ trading guide chart, we can see that the Kiwi had rallied at the release of the report and consolidated for most of the late Asian and London session before it shot up during the U.S. session.
I’m using the 15-minute chart for this day trade so it’s easy to spot the strong resistance and consolidation at the .8365 area. I set my buy order at .8370 in case it breaks up and I put my stop loss below the intraday low (.8335). If all goes well and NZD/USD reaches the .8400, I’ll think about putting my SL at break even or closing my trade altogether.
Once again, here are the details:
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