Had to cut this EUR/USD long trade quick as Dollar sentiment took a 180 degree turn to the bullish side. What brought the Greenback bulls back?
Trend Pullback on EUR/USD
Right around the U.S. equity market open today we saw the Greenback take flight against the rest for the majors. It wasn’t likely the freshly released Producer Price Index numbers as those disappointed expectations, but more likely a return in focus to the potential for tax reform to actually get done in the U.S. after speculation that Trump could get some Democratic support.
I don’t know if this was the only catalyst for the USD rally (a quiet North Korea and initial hurricane shock could be some relief as well), but whatever the case may be, the potential support area notated in my original trade idea was easily blown away as the market fell through my entry level at 1.1950 and even the psychological level of interest at 1.1900.
Given that this move was on a potentially game changing catalyst, I decided it was best to just close my EUR/USD play right away, manually at 1.1892, for a very small loss.
Total: -58 pips/-0.16% loss on 0.50% risk
In hindsight, I’m not sure how I could have seen the rise in confidence in tax reform, but I think I could have been less USD bearish given the fading fears from North Korea and the extent of the damage done by Hurricane Irma. At the very least, maybe a little more cautious.
So, a very small loss on the week and now I turn to a few potentially volatile events on the calendar to close out the week. Most notably, I’m look at Sterling pairs with the Bank of England monetary policy around the corner, and when that even comes and goes, I’m sure I’ll have a fresh idea ready. Stay tuned, good luck and good trading!
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