After much debate with myself, I have left both the long position (NZD2m @0.5668) and the short position (NZD4m @0.5150) in place, still net short NZD2m.
Given the back pedaling from the ratings agencies this week, all is not as it seems. I suspect the government has been active behind the scenes, looking to stop a possible downgrade. It was the threat of a downgrade that caused the NZD/USD to drop from 0.6000 to 0.5300 in the first place. Then cutting interest rates by 1.5% pushed the NZD even lower to 0.5000.
If the NZD/USD develops a range between 0.5000 and 0.6000 in the weeks ahead there may be opportunities both sides of the trade.
So I may buy back NZD2m in the low 0.5000 area and move to net square then trade both sides from there.
Not sure yet, but leaving both trades open gives me some options........