So much for counting on a triangle bounce! I decided to close this long GBP/CHF position early when price started to break below the support at 1.2500. In case you missed it, don’t forget to check out my initial trade idea before reading on.
Just when it seemed as though price was finding a floor at the descending triangle bottom visible on the 4-hour time frame, Brexit jitters came back to haunt the pound when U.K. Prime Minister Theresa May confirmed that Article 50 would likely be triggered by March next year.
This set off a new wave of losses for pound pairs, as the currency barely even reacted to upbeat PMI releases. Earlier in the week, the manufacturing PMI printed a rise from 53.4 to 55.4 instead of the projected fall to 52.1 while the construction PMI jumped from 49.2 to 52.3 instead of dropping to 49.1. But nope, there ain’t no stopping ’em bears!
Not even weaker than expected retail sales data from Switzerland was enough to stop the franc from taking advantage of these risk-off flows in the region, causing a break below the support at the 1.2500 major psychological mark. I probably should’ve closed much earlier when price made a quick bounce and seemed to form a tiny double bottom, but I decided it was time to jump ship when support was clearly broken.
Here’s what I ended up with:
P/L: – 125 pips / -0.30%
Still, I’m happy with my decision to trim my losses, as price seems ready to drop all the way down to my stop at 1.2375 or lower anyway. Think I should switch positions and go short this time?
As always, don’t risk more than 1% of your account on a single trade and make sure you read our risk disclosure if you’re thinking of taking the same setups.