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Last week’s across-the-board surge in the US dollar has yielded to a couple of days of back-filling, making for a painful wait for USD bulls as a cavalcade of economic data risks and the Federal Open Market Committee meeting on Wednesday lie dead ahead in an environment where it is difficult to find the volatility pulse. Breakout signal tracker
Our NZDUSD short was stopped out just below break-even at the lowered stop. We may have gotten too aggressive in managing risk, but it is also extremely disappointing that the price action has taken the pair some two ATR from the max draw-up. Likewise, our EURUSD entry was unfortunately low and the stop may be too tight, but we’ll be happy to leave this alone and re-enter on new breaks lower if the USD surges again after this week’s event risks.
The stop on our EURSEK long survived the consolidation on Friday and the position looks in good shape for more upside on fresh higher closes. We add a USDCAD long based on last week’s break higher as the pair has been one of the better-behaved USD pairs on this dollar rally. We have added a Sum, indicating the sum of the risk versus reward for the last 10 signals that we have tracked. It is more useful than the “percentage” measure if we assume that a fixed maximum amount is risked per signal (i.e. position size adjusted for distance to the stop).