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With a potentially volatile event coming up this week, I’ve decided to adjust my forex trades to lock in small profits and avoid event risk.

Long EUR/USD

Original Trade Idea: Shorting Back into the EUR/USD Downtrend

EUR/USD 4 Hour Forex Chart
EUR/USD 4 Hour Forex Chart

My main adjustment ahead of this week’s FOMC meeting was close down my EUR/USD short.  I think with recent U.S. data coming in weaker (especially weaker inflation and housing data), it’s probably a better than average probability we’ll get rhetoric this week from the Fed that they’re not in a rush to raise rates after QE ends.

Of course, I won’t know if that’s the case for sure until Wednesday, but I’ve learned that trying to guess and play these events tends to be more harmful than helpful to my forex account.  So, with that mindset, I closed my EUR/USD short manually at 1.2700 to lock in a very small profit:

Total: +75 pips/ +0.25% gain

Long USD/CAD

I have also closed out my orders to buy USD/CAD at 1.1175 as the event is likely to push this pair to the downside quickly.  I’ll avoid event risk for now and re-assess the situation after the FOMC monetary policy announcement to see if going long USD/CAD is still a high probability trade.

Long NZD/CAD

Finally, I’ve still got my NZD/CAD long position on, which gave me a little bit of heartburn last week as it went from .9050 all the way down to .8750 to put me in the red.  Fortunately, since this is a longer-term trade, I’ve protected myself from the big swings by trading small, and now I’m back in the green by about 100 pips.  I will continue to hold for now since the trend is still in tact and buyers seem to be holding the .8700 area for now.

That’s it.  No new ideas for now as I’ll wait for the FOMC monetary policy announcement, which will be at 6:00 pm GMT (2:00 pm ET) on Wednesday.  I’ll see what they have to say and how the forex market reacts before developing new longer-term biases.  Stay tuned!

This content is strictly for informational purposes only and does not constitute as investment advice. Trading any financial market involves risk. Please read our Risk Disclosure to make sure you understand the risks involved.