Positive European inflation data and the latest news on the Greek debt drama prompted a buying spree in the euro. I had no choice but to close out on my euro short positions. Here’s a quick trade review.
Original Trade Idea: Technical Short on EUR/NZD for Long-term Position
Thanks today’s above mentioned catalysts from Europe, EUR/NZD finally broke above my technical arguments for a reversal back into the longer-term downtrend. Both technical and fundamental invalidations call for an early close to my trade, so that’s what I did..manually closed EUR/NZD at 1.5531
Total: -456 pips/ -0.91% loss
So, a small hit on this longer-term position, one that changed as the story changed, mainly on the euro. The Kiwi also went into bear mode since I entered this trade, going from concerns about the fire hot New Zealand housing market prompting “no interest rate cut” bets to weak data putting pressure on the Reserve Bank of New Zealand. Overall, it’s still a solid setup I’d take in the future, but I gotta do a better job with cutting these type of developments sooner.
Original Trade Idea: Support Break on EUR/GBP?
EUR/GBP failed to break the .7100 handle, both on weak U.K. data and today’s positive euro catalyst. Unfortunately, I wasn’t able to limit my max risk but cutting early as euro pairs spiked higher early in today’s U.S. session. My stop at .7300 was triggered to close my position out.
Total: -200 pips/ -1.0% loss
Again, it was a pretty solid technical setup to play the longer-term trend lower, plus the fundies did support the bearish outlook. But like my EUR/NZD above, catalysts often change and I didn’t change with it. This short was a good setup, but I probably should have closed early with the week U.K. GDP data and when the moving averages were broken to the upside. Something to keep in mind for the next time I run into a similar situation.