Earlier this morning, the Bank of England took on a dovish stance driving a massive sell-off on the Sterling.
Here is a summary of this morning’s events:
- 6-2 vote to keep rates steady
- Growth forecasts trimmed from 1.9% to 1.75% for 2017 and from 1.7% to 1.6% in 2018
- Inflation forecast has not been trimmed, but expected to peak at 3% in October
Over the night, I took several trades. Some related to a directional bet on the Sterling while others remained a bit more isolated. Here is just a recap of how those trades are performing.
GPBJPY: entered long on 1-hour and 4-hour support level
While I admit this is actually a rather week level, I took a long entry in anticipation of more hawkish comments given that the inflation rate has already surpassed the 2% mark. Unfortunately, this trade is pretty straight forward and ended in a stop out. Fortunately, this trade closed out a bit before I closed out my previous EURNZD long where the buying pressure was weakening.
EURNZD: closed out long position
The entry analysis was covered in my previous post so here is just the exit. Price is climbing a lot slower than I would’ve liked it and the most recent candles also look a bit concerning. There are two small bullish candles followed by a big bearish candle that covered it completely. This could be a sign of selling pressure beginning to enter so I got out of my long position.
EURGBP: long entry as new highs held supported
This is more straight trading off my daily level where price broke above the new high and continued to held supported. Given the dovish stance that the Bank of England took, this pair rallied representing a weaker stance on the quote currency (Sterling). I currently plan on holding this trade to the 0.9125~ level at least as it marks at least the next daily high.
Overall, luckily, my GBP longs losses were covered nicely and I’m still riding the profitable trades.