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Well, that was quick! GBP/NZD bears took control much sooner than expected, pushing the pair down not too long after I posted.

With the market now testing the previous support area and the holiday weekend ahead, I decided to close the trade for a very nice short-term return-on-risk. Here’s a quick review!

Short-term Fib Play on GBP/NZD

GBP/NZD 1-Hour Forex Chart
GBP/NZD 1-Hour Forex Chart

Yesterday, I decided to sell GBP/NZD for a short-term play, playing my fundamental bias favoring the Kiwi over the British pound. I was expecting the downtrend to eventually resume after a bounce higher, but the pair quickly moved lower on the session for reasons I can’t seem to figure out. The news flow was light and there were no direct catalysts from either New Zealand or the U.K.

It was likely a risk-on move echoing Thursday’s broad positive risk sentiment after we saw improving U.S. unemployment data and another positive coronavirus vaccine update.

Whatever the case may be, this pair got down to the previous support area much sooner than I thought and based on past experience, I decided to close this position manually (1.9160) for a good one session return-on-risk!

Total: +100 pips / +0.50% gain on 0.50% risk taken

Overall, this was a good trade and close out as I’ve learned that fast gains like this should be taken as a gift, and be taken off of the table quickly. I’m still bearish on this pair, so I may hop back in if another opportunity to short at a better price presents itself and the environment makes sense to do so.

Until then, stay tuned for updates and 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.

This content is strictly for informational purposes only and does not constitute as investment advice. Trading any financial market involves risk. Please read our Risk Disclosure to make sure you understand the risks involved.