It looks like I’ve milked all I can in the down move in EUR/GBP, so I decided to close my short position to take profits. Here’s a quick forex review.
Original Trade Idea: Forex Trade Idea: EUR/GBP Short
Strong bullish moves this week, likely got a boost from the mostly positive readings for various consumer lending and spending indicators, as well as broad positive sentiment coming back to lift the high-yielders and global risk assets this week. In EUR/GBP, it was a straight shot to the downside, but today it looks like all of the sellers have left the building with the major psychological level of .7000 seems to be holding. I think I’ve taken as much as I could from this trade so I decided to close all positions manually at .7003.
1st quarter: +97 pips
2nd quarter: +147 pips
Total: +122 pips avg./ +0.52% gain
Overall, it was a textbook trend retracement trade that worked out my way this time. This pause may be short-term because of the trending price action and fundamental arguments for Sterling to continue to be more attractive that the euro, but for now, I’m happy to take profits going into the weekend and will look for new opportunities next week. Until then good luck!