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Ack! I knew I should’ve been more patient in waiting for a pullback on this one, but do you think I should add at this point?

Long EUR/NZD Idea

I may have jumped the gun a wee bit too early when I jumped in a long position based on a short-term rising trend line. In retrospect, I really should’ve waited for a correction to this longer-term support zone instead.

You see, I had been hoping to catch a bullish momentum entry on a break of the daily double bottom neckline, and I was afraid of missing out on the move. Thank goodness I set a wide stop below the 1.7500 mark and risked a smaller-than-usual position on the first entry.

EUR/NZD 4-hour Forex ChartEUR/NZD 4-hour Forex Chart
EUR/NZD 4-hour Forex Chart

The question is: Should I add to my long position now that price has dipped to my ideal entry level? This is still in line with the 38.2% Fib and rising trend line, after all.

However, I’m a bit worried that stochastic has plenty of room to head south before indicating a return in bullish momentum. Price has also formed lower highs recently and continues to hover around the trend line, possibly gearing up for a break lower.

The release of Italy’s 2019 budget could prove to be a huge event risk for this trade also, as officials have threatened not to back this if it doesn’t allocate enough funds for their spending plans. More political woes could put more downside pressure on the euro until the following week.

Then again, the Kiwi is already in a pretty weak spot since the RBNZ pointed out that they’re keeping interest rates at their current levels until 2020. They also reiterated their not-so-upbeat view shared in the earlier rate statement, highlighting possible risks from global trade tensions.

For now, I’ll sit on my hands and probably wait and see how the Italian budget release goes before making adjustments. If the euro drops quick, I hope I’m just as fast enough in trying to cut losses. On the other hand, if support keeps holding throughout the event, I’ll try to add to my long position.

What do you guys think?

Happy

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