It was an all-around bad week for the Greenback, which means a bad week for Cable short forex positions. I was taken out at my max stop for a small loss; here’s a quick forex review.
Original Trade Idea: Forex Trade: GBP/USD Short on a Bounce
My technical arguments for potential resistance didn’t hold this past week, a big thanks to a slew of weak U.S. data that included retail sales, PPI, housing data, and unemployment data. This of course takes away from the argument that the Federal Reserve should raise interest rates in June, which happens to also raise an argument that the potentially overdone USD rally was due for a pull back. I can also make the argument that recent positive data from other countries (e.g., Aussie jobs, Canadian jobs, U.K. unemployment data, etc.) are creating less demand for USD as a safe haven asset. Whatever the case may be for USD weakness, it was enough to break above the Fibs and moving averages, and eventually hitting my stop at 1.4970 to close out my trade.
1st half position: -250 pips
2nd half position: -155 pips
Total: -202.5 pips avg/ -1.0% loss
Overall, it was a textbook technical setup that went negative on a fresh catalyst for the Greenback. That just happens sometimes when you trade, and probably the only thing I would have done differently was to close manually sooner than let the max stop be triggered.
That’s it for now on Cable, but I’ve still got an open short AUD/NZD position to watch out for, and some potential USD short trade setups rattling around in my head. Stay tuned for new ideas by following me on Twitter and Facebook!