My long CAD/JPY trade went fine, as I was able to hop in at 96.00 and take profits at 97.50. I decided to lock in a few pips ahead of the FOMC statement though, leaving the rest open until it hit my PT during today’s Asian trading session.
With that, I managed to score a 0.63% win on the entire position, as I risked only 0.5% on this short-term trade and closed half at 97.00. Not bad, eh?
What I’m a bit bummed out about now is my short EUR/NZD trade, which might wind up erasing my recent CAD/JPY wins! As you can see from the forex chart below, the pair broke past the falling trend line that I drew and almost hit my stop.
For now, the pair is retreating once more, as traders probably realized that they overreacted to the latest RBNZ statement. The central bank decided to keep rates on hold as usual while emphasizing that the Kiwi is still overvalued – nothing new, really!
I’m inclined to think that this pair might fall back to the 1.6000 levels soon, as inflation reports are due from the euro zone’s top economies. Weak readings would remind forex traders that deflation is a very real possibility in the region and that a technical recession is looming, which might be enough to drive the euro lower once more.
Any arguments for an early exit?
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