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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

EUR/NZD 4-Hour Forex Chart
EUR/NZD 4-Hour Forex Chart

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!

This content is strictly for informational purposes only and does not constitute as investment advice. Trading any financial market involves risk. Please read our Risk Disclosure to make sure you understand the risks involved.