The first week of a new month is typically a busy one, and with so many top tier events, I thought I’d reduce risk and lock in profits on a couple of open forex trades.
Original Trade Idea: Resistance on GBP/USD at Previous Consolidation Area?
GBP/USD managed to grind higher as I had hoped to get in at a better price for my short bias, but it was only enough to trigger my half position short at 1.5500. Looking at this week’s forex calendar, I see the Bank of England monetary policy decision and U.S. employment data as potential risk events that could blow up in my face, so I decided to reduce my risk by canceling my short order at 1.5700 and moving my stop on my open half position from 1.5800 to breakeven at 1.5500.
If the market does go my way, I’ll be eyeing the previous area of interest around 1.5200 as my next adjustment level to potentially scale in another position while trailing my entire position stop to keep my risk low.
Original Trade Idea: Short-term Forex Range Play on USD/CAD
Looks like I caught a bit of luck on my long USD/CAD after the Greenback got a late week boost on some not so bad U.S. inflation and GDP data this week. Since then, the pair has broken above the psychological level of 1.2500, but it’s running into a couple of bearish arguments for resistance: falling trendline and the bearish divergence between price action and the stochastic.
Both chart patterns are marked on the one hour chart above and while I don’t think we’ll see sellers jumping in like crazy here, it’ll at least get some long players a little less comfortable going into the busy economic calendar. With that thought, I decided to close the trade manually (1.2533) to lock in profits.
Total: +88 pips/ +0.22% gain
That’s for now, and as for my short AUD/NZD and short NZD/USD trades, I’m leaving those alone for now as I think the upcoming RBA statement and Global Dairy trade data are likely to give me the moves I’m looking for. And if I’m wrong, I’m only in with half positions on each of them so the pain to my account will be hardly felt at all. Stay tuned!