It looks like pound bears are running out of steam and can’t push GBP/CHF below the previous lows. Because of that, I’ve decided to book profits off this short trade.
In my initial trade idea, I shorted on a pullback to the broken triangle support then planned on adding on a higher retracement to the 61.8% Fib. However, I chickened out on that second entry because the BOE was about to make its monetary policy statement then.
As it turns out, the U.K. central bank delivered on its dovish promises and more, cutting interest rates by 0.25% and even expanding its bond purchase program. I wished I had been able to jump in that sharp drop but price action was just way too fast during the announcement.
Still, I’m happy about getting some skin in the game with my 0.25% risk on my market entry at 1.2870. Price came close to testing the swing low then bounced, indicating that pound bulls are putting up a fight. The pair made another test of the previous lows yesterday then bounced again so I’m thinking this floor could hold for now.
Here’s what I ended up with:
P/L: +100 pips / +0.09%
I know it’s not a lot and I know I could’ve upped my gains by sticking to the plan, but a win is a win and I’ll take it! It’s not too bad for a short-term trade anyway and it helps boost my confidence that I can climb out of my losing streak.
As always, don’t risk more than 1% of your account on a single trade and make sure you read our risk disclosure if you’re following my trade decisions!
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