Time to lessen my risk exposure!
A couple of days back I showed you a potential GBP/USD bounce on the daily chart. Well, since last month I’ve only had a total of two positions as GBP/USD’s rally seems to have weakened on the lack of willingness from the pound bulls to push the currency higher. Heck, GBP/USD can’t even break above 1.6800!
The lack of follow through on Cable’s rally might have something to do with Carney’s constant reminders that interest rates are unlikely to increase anytime soon. It also doesn’t help Cable that the Fed is likely to ramp up its tapering soon.
This is why I have decided to close my first position ahead of the MPC meeting minutes and the FOMC statement. With Carney likely to brush off calls for a rate hike; the Fed possibly speeding up its tapering, and GBP/USD threatening to break below 1.6600, I have to be cautious about letting my trade run.
I have locked in a 0.30% gain by closing my position and I’m risking around 0.50% with my second position. I’ll only lose 0.20% if Cable hits my stop loss at 1.6490 but I’ll also have a chance at hitting another win if price bounces back to the 1.6800 area. Fingers crossed!