I’m finally out of my CAD/JPY short forex trade after my adjusted stop to breakeven was triggered during today’s Bank of Canada policy statement.
Original Trade Idea: Forex Trade Idea: CAD/JPY Consolidation Breakout?
As I hoped, CAD/JPY broke below the rising trendline and moving averages notated in my original trade idea, but unfortunately, there was no momentum for sellers to ride on as broad risk-on sentiment (easy money from central banks and strong comdolls) held CAD/JPY from breaking strong support around 91.80.
I was planning on cutting the trade earlier, but I thought that if there was anything that could get my trade over the hump, it would have been today’s Bank of Canada monetary policy meeting. Of course, I didn’t want to risk a large move going against me, so before the event, I adjusted my stop to breakeven (92.25).
The Bank of Canada maintained the key interest rate at 0.50%, which sparked a sharp rally in the Loonie afterwards, which took me out of my CAD/JPY short at 92.25:
Total: 0 pips/ 0.00%
Looking back, the only thing I probably should have done differently was to take profit on the third or fourth retest of the 91.80 area, but with the market making lower “highs,” I thought I’d get the breakout I was hoping for. Also, I thought that the profit potential was still favorable with the BOC coming up and highly unlikely of raising rates. Overall, it was a solid setup and execution on entry, but I should have walked away with a little something given that I did have a small profit most of the time I held this trade.
That’s it for now and I’m still watching my open EUR/GBP short, which is now solidly against me on broad British pound weakness. It’s still quite a ways away from my stop, so I will hold on for now, especially with the ECB potentially announcing more easing after their own policy meeting this week. Stay tuned as I may make an adjustment soon depending on Asia and early London price action!