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Forex Trade Update: 2014-0506

Looks like the rising trendline and moving averages couldn’t hold off sellers, triggering my sell orders and putting me in a short EUR/NZD position.  With momentum on my side, I thought I’d reduce my risk with a quick trade adjustment.

Original Trade Idea: Taking Another Shot at EUR/NZD

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

Since triggering my short entry at 1.6050, the pair has moved lower by about 100 pips, currently testing the 1.5950 area.  Originally, I thought I’d wait to see if EUR/NZD tested 1.5770 before adjusting, but with the New Zealand employment data and European Central Bank meeting this week on monetary policy, I thought I’d make a quick adjustment.  Both events have big potential to move their respective currencies, but the euro has been known to move and flip directions very big and quickly on Draghi comments during the press conference; I’d especially like to take some risk off the table ahead of Thursday’s event.

Adjusting stop from 1.6350 to 1.6250. Risk reduced from 0.50% to 0.33%.

This adjustment reduces my max loss to the trade but still gives me 300 pips breathing room for potential sudden volatility spikes from the ECB decision, bad NZ employment data, or any other surprise economic or geopolitical events.

Overall, I’m still very bullish the New Zealand Dollar, and with the broad strength we’re seeing in the currency recently (possibly on potential positive surprise in NZ data), this trade still has better than average chance of continuing lower.  For now, I’ll just have to see how the data comes in and how the market reacts to it….stay tuned!

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