Forex Trade Reviews
I decided to close out my forex trades on Friday to avoid weekend risk, and this weekend there’s a lot of risk due to the rising tensions in the Ukraine.
The possibility of war tends to spark risk aversion behavior in the markets, prompting traders to take money out of “riskier” assets to get back into safe havens, or to buy back the assets used to fund higher-yielding trades. In my case, that means I think we’ll see a short-term bullishness in the Japanese yen, so I decided to close out my long USD/JPY trade.
Also technically, this pair has been consolidation over the last few weeks, finding resistance at 102.60 as well as support along a rising trendline. We finally saw a break, but to the downside, which I took as a signal an up move is not going to happen soon with the possibility of military action happening in the Ukraine. I decided to close manually, at 101.91, as the pair moved lower.
Total: -59 pips/ -0.17% loss
I still believe USD/JPY will move higher over the long-term, but for now, risk sentiment will be the driver, which may hinge on geopolitical risk for now.
I just opened my NZD/CAD long trade this week, and it immediately went higher after the resistance break around .9250, the technical reason why I went long this trade. As I expected, Canadian GDP came in weaker-than-expected, which gave it an immediate boost higher after the event, but sold off within the hour. This could have been a “buy the rumor, sell the news” type play as the pair did run up higher ahead of the event, or it could have been on the fears of conflict in Ukraine sparking traders to take profits–or maybe both. Either way, I decided that it was a good idea to take profits, closed manually at .9334, and it looks like it was a good call as the pair closed the week just a few pips above my entry.
Total: +64 pips/ +0.29% gain
I still like this trade as well, but as I mentioned earlier, I think trading on fundies are out the window, at least right now.
Combined, it was a small win on what was mostly a quiet month of trading. Again, I still see both pairs moving to the upside on fundamentals, but in the short-term it may be downside moves from here. I actually don’t mind that because that just means I can hopefully get into my long-term biases at a better price.
That’s it and thanks for checking out my blog. Have a great weekend!