Luckily, my AUD/USD position survived a spike higher not too long after I entered as global growth fears took over to push forex traders back into sell mode. Time to lock in profits!
Original Trade Idea: Forex Trade Idea: AUD/USD Short
After the initial reaction of the FOMC meeting, it looked like risk-on was back on when AUD/USD made another run up to .7275. But on the second test, sellers turned back the bulls in the blink of an eye with a return of focus to the global growth fears that may have contributed to the FOMC holding off on a rate hike in the first place. Since then it’s been a near straight shot down and the market is now testing the major psychological handle of .7000.
With the stochastic showing potentially oversold conditions at a major psychological level, I’ve decided to lock in a small profit to create a near risk-free trade. I have adjusted my stop to .7100 to lock in 70 pips (+0.175%).
The rest of the week looks like volatility is likely to stay up with mid-to-top tier U.S. events coming up, and with the data looking to come in mixed in terms of positive or negative for the Greenback, I think it was a good idea to roll down the stop rather than close out the trade all together. Of course, I won’t know until the end of the week, so stay tuned for updates then!