My adjusted stop loss got hit on a pullback with this pair, but I’m still open to the idea of reentering this trade if fundamentals support it. What do you think?
This pair had been showing a lot of strong upside momentum last week so I thought it was time to trail my stop higher to protect my gains. However, the tide turned on Friday when U.K. officials highlighted Brexit risks to their economy and the euro zone, setting off a sharp drop for the European currencies then.
This was enough to take EUR/AUD down from the 1.5100 area to my adjusted stop loss at 1.4860. I managed to lock in a few teensy gains from this trade, but I’m a bit bummed out knowing that I was already up by a pretty good amount before the sharp selloff took place. Also, I’m not too happy about the fact that the negative rollover ate up all my tiny profits.
In retrospect, I probably should’ve trailed my stop slightly higher to lock in more gains or I would’ve been better off closing early when price showed signs of falling below the 1.5000 handle. But as they say, hindsight is 20/20 and I think I should focus my energy in figuring out if it’s still worth hopping back in.
The RBA minutes are up for release in a bit so I’ll wait and see how the Aussie reacts to this report before taking any action. In their actual policy statement a couple of weeks back, RBA Governor Stevens mentioned their concerns about risks from emerging economies and weak inflation but stopped short of cutting interest rates again. If their minutes indicate that they’re keeping the door open for further easing, EUR/AUD might pop back up once more and I’ll try to jump in long.
For now, here’s what I ended up with:
P/L: +20 pips / 0.00%
Do you think I should hop back in a long trade? As always, don’t risk more than 1% of your account on a single trade and make sure you read our risk disclosure if you’re thinking of taking the same setups. I’ll keep y’all posted through my Twitter account if I’m making any adjustments.