Woohoo! Finally some strong downside momentum on this EUR/NZD short position! Because of that, I’m rolling my stop lower to lock in a few gains as planned. Make sure you check out my initial trade idea before reading on.
The descending channel visible on the longer-term time frames is still very much intact, and price just moved below the mid-channel area of interest. This signals that bears are stepping on the gas and might be on track towards taking the pair further south to the channel support near the 1.4500 major psychological level.
Since the pair already broke below several support areas, I’ll be rolling my stop down just slightly above the latest one at the 1.4850 minor psychological mark. This way, I can be able to have 40 pips in the bag while letting my trade run, hopefully all the way down to my profit target.
Earlier today, New Zealand printed a stronger than expected quarterly CPI reading of 0.4% versus the projected 0.3% uptick for Q4 2016. This was mostly due to higher transport prices and an increase in housing-related costs, which brought the economy’s annual CPI to 1.3% and reminded market watchers that the RBNZ might not need to lower interest rates again anytime soon.
The euro, on the other hand, took some hits after Germany printed a surprise decline in its IFO business climate index. The reading slipped from 111.0 to 109.8 this month instead of improving to the projected 111.3 figure. Components of the index revealed that businesses in the euro zone’s largest economy aren’t feeling very optimistic current and future industry conditions.
Right now, I’m locking in a 40-pip or 0.05% gain by rolling my stop just a bit below entry. Price has made it halfway down to my target and I’m looking to trail my stop a little lower again once it moves below the 1.4700 handle. As always, don’t risk more than 1% of your account on a single trade and make sure you read our risk disclosure if you’re thinking of taking the same setups.
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