After flipping my bias in EUR/NZD to short, momentum continued into my favor. After a strong move, I’ve decided to close my trade for a profit. Here’s a quick review.
EUR/NZD Momentum Higher
In mid-August, I decided to play the momentum higher in EUR/NZD, going with the driving themes of improving European data / European stimulus deal versus speculation of negative interest rates coming to New Zealand. I started with a nibbler at market (bought at 1.8140 with 0.33% risk) and then an additional buy order at 1.8010 was triggered for an average price of 1.8058 and a total of 0.33% risk.
But after the themes changed for both currencies (disappointing European business sentiment data and fading speculation of a rate cut from the RBNZ, I thought that the pullback in EUR/NZD may have legs. So I decided to close my long for a small loss and reverse to a short position at 1.7927 with 1.00% full risk.
1st Long: -213 pips
2nd Long: -83 pips
Total: -0.27% loss on 0.66% risk
Since then, EUR/NZD moved lower with a bit of speed, breaking a few minor levels of interest before finding support just above the 1.7650 handle.
We tend to view these fast moves as a gift, and past experience has taught us that it’s best to take these gifts to the bank. Plus, with a new month bringing in a new round of economic updates and catalysts just around the corner, it’s a good idea to take a step back a re-assess the new environment.
With that, I closed my EUR/NZD short position manually at 1.7701 for a profit:
Total: +226 pips / +0.68% gain on 1.00% risk.
That brings my net gain to +0.41%, which is not a bad haul for being wrong at first.
Looking forward, I’m still fundamentally bearish on the pair but I think that without any major schedule potential catalysts this week, it’ll be choppy price action. If we get a surprise, then I’ll re-assess for another potential trade in EUR/NZD. stay tuned!
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