After a big move against in the Kiwi and with the RBNZ monetary policy statement coming up soon, I decided to close out my AUD/NZD short. Here’s a quick review.
Trade Closed: Downtrend Pullback on AUD/NZD
Looking at the chart above, we can see a clear break of the broken support area and Fibonnaci area that I used to frame my short AUD/NZD fundamental bias. This momentum higher was likely due to a mix of continued global risk-off sentiment as trade war fears grow (the Kiwi is the high-yielder in this pair) and possibly on the weak ANZ business confidence release during the Asia session.
Since that release, AUD/NZD has rallied as high as 1.0850ish, more than its daily range of about 57 pips, a clear sign of big intraday momentum in the pair. And with the Reserve Bank of New Zealand monetary policy meeting coming up very soon, (and not likely to spur bullish sentiment in the Kiwi), I decided to close the pair manually (1.0842) to avoid potential further bearishness the RBNZ meeting may bring:
Total: -70 pips avg/ -0.22% on 0.50% risk
It looks like sellers have taken back control in the afternoon U.S. session, a reversal I wasn’t expecting, so I think it was the right move to let go.
I’m still bearish on the pair at the moment, but let’s see what the RBNZ meeting gives Kiwi traders before re-assessing and seeing if being bearish still makes sense. Stay tuned!
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