After falling back to trigger my long orders, GBP/NZD popped up to give me a quick profit this week, and with a major economic update from NZ, I’m adjusting to lock in some profits ahead of the event.
GBP/NZD Resistance Break-n-Retest
Despite a lack of Brexit headlines or major economic catalysts, Sterling had a rough go last week, enough to trigger my long position at 1.9400. And after a bit more of a dip before finding support at the strong support area around 1.9350, the bulls have strongly taken back control, once again without a major catalyst that can be found at the moment.
In just a few hours, we’ve got a major economic update from New Zealand in the form of the quarterly employment conditions report. Expectations are mixed, and given the weakness seen in the latest New Zealand PMI update, odds are that the number could have a bearish influence on the Kiwi. But surprises always happen in the markets, and after an already strong move, I didn’t want to risk all of the profits I already made, so I decided to close half of my open GBP/NZD position manually (1.9521) and roll my stop on my remaining position up to my entry price at 1.9400.
This essentially locks in a +0.17% gain on 0.50% original risk, and the stop adjustment creates a near “risk-free” trade (slippage is always a risk, especially the currency markets), which is not bad after only a week being live.
I like this adjustment not only to avoid a surprise from the NZ jobs data, but also because of the upcoming Bank of England monetary policy decision on Thursday. Monetary policy updates can sometimes be tricky, so reducing risk ahead of them is almost always a good idea. And after that event passes, I’ll reassess the data and see if further adjustments need to be made to the position like adding back or closing it out altogether.
That’s it for now. What do you guys think of the adjustments? Let me know in the comments section below!
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