Locking in Profit on AUD/CAD Short

Forex Trade Adjustment: 2014-09-18

Looks like I caught a bit of luck with my AUD/CAD short trade as the breakout lower still had momentum.  With the pair now testing a minor support area, it is time to manage the position.

Original Trade Idea: Momentum Break of Parity on AUD/CAD?

AUD/CAD 4 Hour Forex Chart

AUD/CAD 4 Hour Forex Chart

I’ve zoomed into four hour chart to look a recent price action better, and it’s pretty easy to see that AUD/CAD traders took the break of parity as an opportunity to short more in this current environment. I was actually pretty lucky that the pair got back up to parity after the break as it only saw that level one more time before dropping lower. The recent move lower is a continuation of the Aussie sell off (related to weak Chinese data), with the help of positive economic data released from Canada this week (better-than-expected manufacturing sales and foreign securities purchases).

With the pair dropping over 150 pips so far this week and the weekend coming up, I’ve decided to lock in some profits by reducing my position size and trailing my stop to break even.

Closed half of my position at .9840 and trailed my stop to 1.0000

This locks in a 0.32% gain on the trade and since I still have a position targeting the next major support at .9500, the trade could add another 1.00% on top of my locked in profits if it continues to go my way.  If Canadian data over the next week (CPI, wholesale sales,  and retail sales) continues to be positive, the Loonie just might get down there faster than I previously expected.

That’s it for now on AUD/CAD…I’ve got my eyes on yen pairs at the moment to see if there will be a decent pullback on that wicked selloff this week, and I’m watching EUR/CHF to see if it will get down to the 1.2000 floor that the SNB is closely watching.  I’ll let ya know if I see any new opportunities, but until then–stay safe and stay tuned!