I managed to grab a couple hundred pips with my AUD/USD short, and with big economic events coming up, it’s definitely time to lock in some forex profits.
Original Trade Idea: Forex Trade Idea: Rising Wedge on AUD/USD?
Since I put this trade on (short quarter position at .7167), AUD/USD drew in enough sellers from the bearish sentiment on China worries to break below the rising lows originally pointed out in my original trade idea. And the sentiment was enough to drive the pair below the major psychological level of .7000, after which it bounced to restest before heading lower. .6900 seems to be the next area of strong potential support, and with Australia coming out with employment data this week, I’ve decided to adjust my position to lock in a small profit ahead of a major economic report.
Closed short orders at .7400. Rolled stop on open position to .7060 to lock in a very small profit and create a risk-free trade ahead of event risk.
Nothing to do now but wait for the Aussie jobs number, which is expected to disappoint according to the forex calendar. Also on the calendar, we have U.S. producer price index and retail sales data this weak, also expected to come in weaker-than-previous reads. This may limit any downside moves in AUD/USD, so I may cut my trade before this data.
Overall, if the market does move lower and I haven’t been stopped out, I’m looking for a solid break and hold below .6900 to add another short position and trail stop lower, but I’ll definitely wait to see the behavior around that area before adding to my winning position.
What do you think? Keep the dream alive and go for a bigger pay day, or cut the trade now to keep a small profit. Let me know in the comments below and stay tuned by following me on Twitter and Facebook!