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The Kiwi ain’t selling off as much as I thought it would, so I’m out of these short NZD positions for now while I reevaluate my fundamental bias.

Long EUR/NZD Trade

My long position on this pair was actually going quite well for a while until jawboning hints from a few ECB officials dampened the shared currency’s gains. At the same time, opinion polls leading up to the New Zealand elections indicated a likely majority for the National Party which is seen to be a positive outcome for the economy.

EUR/NZD Daily Forex Chart
EUR/NZD Daily Forex Chart

With that, EUR/NZD barely gained any traction off its bounce from the mid-channel area of interest and might still be ready for a larger pullback to the actual support closer to the 1.6000 handle. I’ve adjusted my SL just slightly above entry for this one when I thought it was already on its way up to the swing high, and this stop was hit earlier today.

I’m not all that bummed out about how this play turned out since I did stick with my fundamental analysis but may have been too eager to go long. I thought the catalysts last week would be enough to push EUR/NZD back to the channel resistance, but this wasn’t the case so I’m happy with how I managed my risk.

Besides, the results of the German elections aren’t looking too good for the euro either as Merkel’s party failed to get the majority. This could mean a bit more political uncertainty for the region’s largest economy and might outweigh upbeat data or ECB tapering expectations in the near term. Anyway, here’s how it turned out:

P/L: +15 pips / +0.018%

Long AUD/NZD Trade

As for my long AUD/NZD position, I can clearly see where it all went wrong in retrospect… but as they say, hindsight is 20/20!

For one, I probably shouldn’t have budged from my earlier decision to cancel open orders on this pair when I thought I already missed the pullback. I could’ve also reduced my losses had I decided to jump ship when the fundamental story seemed to be changing for the Aussie. I should’ve trimmed my short NZD trades in my account since I favored the more solid setup on EUR/NZD, and I could’ve done so when the ascending trend line was broken.

AUD/NZD 4-hour Forex Chart
AUD/NZD 4-hour Forex Chart

Instead, I let wishful thinking get the best of me in waiting for price to fall all the way down to my full stop loss. At that time, I was still keeping my fingers crossed that the quarterly New Zealand GDP would generate a bearish reaction from the currency, either from a downbeat result or profit-taking once the results come in.

As it turned out, the polls leading up to the elections were one of the bigger drivers of Kiwi price action then while the Aussie was most vulnerable against its stronger peers since gold and iron ore prices have been tumbling.

A lot of painful lessons learned on this one, and I’m pretty disappointed with myself on how I froze with my decision-making when I had plenty of opportunities to limit my losses. Here’s the damage:

P/L: -150 pips / -0.5%

Got any tips on how I can bounce back this week and possibly end the month on a slightly better note?



See also: Q2 2017 Trading Performance Review

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