After couple of good days late last week, Pound opened this one on a down note. Fairly strong one at that. Trouble started to brew right from the start, when many of GBP pairs opened down, with gaps. Those gaps were very small, not really tradable by themselves, as far as I'm concerned, but their direction often indicates prevailing trends for next day or so. Even if gaps are filled, that's where trends turn in original direction of the gap. At any rate, opening didn't look all that great for GBP. Or my trades.
Not everybody sees current fall in GBP as strictly speaking bad thing, for either Pound or UK. Some economists claim it is welcome, because it should help exports, and all trade, especially with Eurozone. It could even speed up recovery outpacing that of EU for considerable time. Guess it makes sense in a larger picture. Problem with larger picture is, that no matter how rosy it looks, it can't really be defined well enough to be of help to active traders. For example, I generally agree that Pound is oversold now, but will not hold on to losing trades because of promising picture on the horizon. Or beyond.
First to go was GBP-AUD. Clearly the weakest of the three remaining trades, it was closed just few hours after the open, for a loss of 63 pips. Not much in relation to the gains I sought.
Trade in GBP-CAD was a little simpler. Price made another run on Friday's high, building a minor low. When that level broke and, few hours later, 100 SMA also failed to hold, it was time to dump it. Outcome was -81 pips, but could have been much worse. Without this new low, next support level is about 120 pips lower, one that is being tested now. Might be a good idea to buy it it here, risks are very small.
Last one of Pound trades was EUR-GBP. I stayed in this one for quite sometime, with Euro having own problems. Eventually, I also ditched it, for about 40 pips loss.
My total sequence of long GBP trades produced three winners and three losers, with few smaller trades below. Winning trades were much better than losing ones, so altogether, nothing to complain about.
This week I still trade in limited capacity, as my other project demands a lot of attention. Time permitting, I'll be trying to buy Pound crosses (yes, again). BTW, Yen pairs have built possible rounded tops and are bouncing right now. These levels, if broken, might be good entries if somebody wants to short them. Something to keep in mind.
