Ever since the possibility of Scotland leaving the U.K. took down Sterling, I’ve been looking to close my GBP/CHF long. Today’s spike higher was that opportunity. Here’s a quick review.
Original Forex Trade Idea: Going Long GBP/CHF for Long-Term
As my main man Forex Gump explained this morning, the possibility of Scotland leaving the U.K. has been a big deal to forex traders, who have lightened up on Sterling longs since preliminary polls indicate that pro-independence voters are slightly in the lead. This is a new twist to the pound’s story, one that I don’t understand enough to want to hold pound positions at this time, especially as it easily took GBP/CHF down from above 1.5200 to retest 1.5100 just this week.
I’ve been looking for an opportunity to close this pair, and with today’s spike in volatility thanks to the surprise rate cuts from the ECB, I decided to close manually at 1.5186 as soon as I got above breakeven for a small profit:
Total: +39 pips/ +0.19% gain
I think the adjustment to close was the correct move, but in hindsight, I should have let the ECB reaction play out a little bit longer as GBP/CHF actually made it back up to pre-Scottish news levels (around 1.5250)….bah!!!! It’s something I’ll just have to remember for the next time we see a surprise rate change from a major central bank.
I still have my EUR/GBP short open, but that’s a short-term swing forex trade that’s almost at my profit target. I’ll update once/if does hit, which I’ll most likely take profit to avoid being in a pound trade for now. Stay tuned!