Pound bears seem to be getting exhausted so I’m taking my profits with my GBP/NZD short position. I’ve sold this pair at the start of the month so in case you missed my initial trade idea, don’t forget to review it first!
I was able to get in with a small position at market on a break of the descending triangle support. I wanted to add to my position on a pullback to that broken support area in order to bring my total risk to 0.5% but price missed my short order at 1.7800 by a few pips.
Soon after, the GBP flash crash took place so I scrambled to add another short position when the move was faded. Price consolidated for a while but proceeded to head in the southbound route as Brexit jitters set in while reports from New Zealand, such as their quarterly CPI and latest dairy index, printed better than expected results.
I wanted to keep pressing my advantage but I figured it would be safer to just keep trailing my stop down in order to protect my profits. The U.K. had a bunch of top-tier reports released this week and stronger than expected figures have been making it difficult for GBP/NZD to sustain its drop.
Besides, I noticed that price broke past a short-term descending trend line I drew to connect the highs on the 1-hour time frame. Because of that, I decided to exit early and take whatever profits I had instead of risking it all on a potential bounce. I ended up with an average of 397.5 pips and a gain of 0.40% so I’m pretty happy about that.
I’m keeping a bearish bias on the British pound but I think it’s time to wait for corrections at this point. I’ll be checking out the other pound crosses also to spot potential entry levels so stay tuned for my next trade ideas or watchlist posts!
As always, remember to never risk more than 1% of a trading account on any single trade. Adjust position sizes accordingly. Create your own ideas and don’t simply follow what I do.
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