Now that the pair is resting at a major long-term support zone, I’ve decided to book profits off this NZD/USD short position but I’m still open to reentering on a pullback or break lower.
As Big Pippin illustrated in today’s Daily Chart Art, NZD/USD is already at the bottom of its long-term ascending channel which has been holding on since the start of the year. I’ve already adjusted my stop just slightly below entry to lock in a few pips earlier this week but I couldn’t bear the thought of potentially losing my current profits on a strong bounce so I just decided to take ’em and run!
With that, I was able to make 200 pips in gains (0.42%) for this short position, which I plan on reopening on a pullback or on a convincing break below the channel support. After all, we’ve got the U.S. non-farm payrolls report coming up and a strong read could reinforce Fed rate hike expectations and dollar rallies.
Before all that, though, traders might be keen on booking some of their profits ahead of the top-tier release so NZD/USD could be in for a quick bounce. I’m eyeing another short position on a pullback to the bottom of the short-term descending triangle around .7250, which lines up with the mid-channel area of interest, or below the .7100 mark depending on how price reacts to the NFP.
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See also: Q2 2016 Trading Performance Review
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