I’ve decided to finally book profits on this short Cable position to avoid potential losses during the U.S. retail sales release. Here’s how it turned out.
I entered this trade on what appeared to be a small pullback from the post-Brexit selloff (Yep, I know that seems like ages ago!) but it turns out the pair was actually starting to form a symmetrical triangle pattern back then. I held my breath when price climbed close to my stop loss above 1.3500 but fortunately GBP/USD made its way back down to the 1.3100 support.
Cable moved mostly sideways for a couple of weeks before the BOE decision came along and triggered a sharp selloff for the pair, eventually pushing for a break below the triangle support and bringing my trade positions back in the green. When price was already nearing the lows at the 1.2900 handle, I thought it was time for me to take whatever profits I had before top-tier U.S. reports were released.
The U.S. retail sales figures came in below expectations, causing a slight pop higher for Cable on Friday and weighing on Fed rate hike forecasts for this year. I’m still bearish on the pound because of the BOE’s policy bias but I think I might be better off shorting the British currency against a different counterpart.
Here’s what I ended up with:
P/L: +87.5 pips / +0.06%
I know it’s not much and I could think of a bunch of ways I could’ve played this setup better, but I figured it’s time for me to shake it off and reset my market thoughts for now. As always, remember to never risk more than 1% of a trading account on any single trade. Adjust position sizes accordingly. Create your own ideas and don’t simply follow what I do.