What downtrend? Last week I mentioned in my initial trade idea that uncertainty ahead of the U.K.’s general elections could extend Cable’s short-term downtrend.
Well, it looks like market players are over the results of the election polls! What’s more, the pound was barely pulled under even though we saw weaker PMIs from the region.
Instead, traders concentrated on the dollar. Specifically, they wanted to see how much the dollar can fall across the board when you combine a weak NFP report, smaller September rate hike prospects, and former FBI Director Comey possibly weakening Trump’s “fake news” case regarding his involvement with Russia.
In any case, Cable only dropped back down to its weekly open price before it (slowly but surely) broke above the falling trend line that we were looking at.The change in market theme, upside breakout, and the 100 SMA crossing above the 200 SMA pushed me to manually close my position.
P/L: -6 pips / -0.0002% on 0.50% risk
In hindsight, I probably should have closed at the earliest sign of the pair breaking above the trend line instead of waiting for it to touch last week’s high. Twice. I was still waiting for pre-election jitters to hit the pound, you see.
Still, a 6-pip dip isn’t too bad considering that the pound is now making new weekly highs against the dollar. Phew!
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