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Tight range-bound action on this pair led me to consider exiting early, but I think we’re seeing some momentum right now. I’ll be making these adjustments anyway.

Long NZD/CHF Idea

Yep, it’s been nearly a month already but this position is still open! I held my breath for a few times back there as the pair kept testing the .7000 floor and couldn’t seem to make any traction heading north.

I’m seeing another small double bottom formation on its 1-hour time frame, perhaps signaling that price has completed its pullback to the neckline of the larger double bottom on the 4-hour chart.

NZD/CHF 4-hour Forex Chart
NZD/CHF 4-hour Forex Chart

In retrospect, I realize that I should’ve been more patient in waiting for a deeper pullback to the .6975-.7000 area before hopping. At the time I went long at market, I was scared of missing the bullish Kiwi action completely!

Still, I have the interest rate differential to thank for the positive carry while I’ve kept this trade open for more than a couple of weeks. I only hope that it could sustain its climb from here, but I’ve also decided that a break below the recent dips should convince me to exit this long position.

Market watchers were disappointed by the latest RBNZ decision as the central bank was not as hawkish as many expected. This forced the Kiwi to retreat from its rally, but the threat of SNB intervention to weaken the franc has kept a lid on this pair’s losses.

Also, it looks like upbeat vibes are returning to New Zealand these days after China’s trade balance beat expectations. Underlying inflation data from New Zealand also indicated positive price pressures that might lead the RBNZ to join the hawks eventually.

I’ve rolled my stop up just below the previous dips (.6950) to get me out of this long position in case Kiwi bulls run out of energy. Another drop to .7000 might also indicate that risk appetite is not strong enough to keep NZD/CHF afloat. This should cut down my potential loss to just a little over 0.4% from the earlier 0.5% risk.

Do you guys think this is the right move or should I just keep my stop loss as is? I’m not that willing to hold on to this trade if it’s all consolidation from here!

 

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