Last post, Samurai Bonds, covered a long trade in EUR-CAD. After following it most of the week, I really didn’t think there would be much to add today.  Earlier in the week Euro-Loonie had another productive buy. None of these trades was great, but they both delivered over 50 pips, nothing to complain about, especially considering that they were fast, straight-to-the-target trades.  When I closed trade yesterday, it seemed to me that price would remain within couple hundred pips range and it would take some time (days, week?) for it to break out. Was I wrong! Not only the up momentum continued to the upper border of congestion zone, but it went right through for additional 100+ pips move.  My exit came at just about the worst possible time.

I’m not trying to kick myself in the butt over it. For that I’d have to hire somebody and it would be an overtime type of work. I’d spend most of my day jack-knifed, learning lessons. But I think it is good to review some of the mistakes, or perceived mistakes, and see why they happened. In this situation I still think that closing trade yesterday was the right decision, only that I should have open new one few hours later on a move above 1.57, targeting about 1.5780, previous high. Following breakout to 1.5900, well, I was watching it, but didn’t think Euro had legs to go the distance today. My trade from yesterday looks jokingly small when plotted on chart including today’s price action.

In all fairness, though, I also had other trades today, including more Euro crosses. Which also was subject of consideration when I was passing on this one. For last couple of weeks I have been keeping vigil over New Zealand Dollar, waiting for it to slide. I took numerous small trades in NZD-JPY, more on it later, but the other Kiwi pair of interest has been EUR-NZD. I finished yesterday’s post suggesting that I’d be looking at possible trades today, just didn’t think they would be already closed.

Opening gap from a week ago have been a target of this trade. Recent highs have been trailed with a buy order, which was filled at 2.0053. Given that volatility has been fairly low this week, I though this trade my last until the weekend, another reason I didn’t want to be in on EUR-CAD. But finally Kiwi had a loud hick-up and this pair went all the way to the gap, closing it. I got out at 2.0400 for almost 350 pips. Good score for one day.

Now the before mentioned  NZD-JPY. Over last couple of weeks I made couple of sells in Kiwi-Yen, without much success. Bigger move was illusive until today. Here also that gap was closed , producing 84 pips. Waiting did pay off, even though here exit was also premature, in light of farther continuation. However, trade parameters were to close the gap, not to try to squeeze out every possible pip. Done.

Here is another look at NZD-JPY, using 4H chart and different software, where I do most of my analytical work. In more general terms, I expect even bigger slide in Kiwi pairs, 63.15-20 for this cross. Could have stayed in it, trying to reach that goal. When seen from this angle, closing this trade also was a premature exit. Guess have to wait for another sell opportunity to form on hourly chart. When (if) that is achieved, we might discover that NZD has much farther to fall.

Mike K.