With the Bank of England set to give their latest monetary policy statement, I decided to close my open short position and orders on EUR/GBP. Here’s a quick review.
Downside Breakout or Fakeout on EUR/GBP?
At the beginning of the month, I decided to scale into a short position in EUR/GBP after a consolidation break to play my fundamental bias favoring Sterling over the euro. I started with a nibbler at market (0.8950) with 0.33% risk and put up additional short orders 0.9025 and 0.9095. Unfortunately, I was only able to get one position in as the pair steadily moved lower for over a week on political developments that lowered the odds of a no-deal Brexit.
I’ve gotten a nice return-on-risk so far, but with the Bank of England set to release their latest monetary policy decision in a couple of days, I decided to take profit with price stalling around a minor psychological level. I’m leading a little bit towards a bearish Sterling move this week as negative business sentiment (UK Manufacturing PMI at seven-year low, U.K. service sector growth slows in August) and Brexit fears will likely keep the BOE dovish for now. So with that, I closed the open position manually at 0.8857 and my addition open short orders above the market to lock in a profit:
Total: +93 pips / +0.13% gain on 0.33% risk taken
We’ll see in a couple of days if this was the right adjustment, but if it wasn’t, I can still re-enter the position IF the BOE continues to show optimism on the global economy and/or they still think a no-deal Brexit will be less severe than first thought.
What do you guys think? Should I have just rolled down my stop or was taking off all risk the way you would go? Let me know in the comments section below!
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