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Well, that went quick! The RBNZ statement wasn’t as cautious as I expected so this pair didn’t really drop from the resistance I was watching. Here’s how it all went down.

Short NZD/USD Idea

You see, I hopped in a short position just before the RBNZ statement last week, thinking that we’d hear a lot of remarks blaming Kiwi strength for the troubles in New Zealand’s economy. Instead, we got an optimistic announcement from head honcho Wheeler that kept this pair holding on to the daily channel resistance.

Just when it seemed stochastic and the pair were ready to head south, another bounce back up above the .7250 minor psychological level took place so I just decided to get out before an upside break happens.

NZD/USD Daily Forex Chart
NZD/USD Daily Forex Chart

In hindsight, I probably should’ve waited for a breakdown of the short-term consolidation to catch any bearish moves if they materialized. This would’ve kept me from prematurely entering a trade ahead of a top-tier event, but I’m still gonna pat myself on the back for cutting my losses quick.

I guess you can say that I took a calculated risk which, unfortunately, didn’t pay off at this time. I did promise myself that I would trust my analysis more and act on it, so I don’t really regret taking this setup.

But with the RBNZ maintaining its relatively hawkish position and with risk-taking still in play, I’m planning on switching to a bullish Kiwi bias from here.

For now, I’ve still got my long USD/CAD position open and stuck around my entry area. Think I should stay patient and keep it open?

Cheers,

Happy

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