GBP/AUD didn’t play out like a textbook ascending triangle is expected to, but I was able to hop in long before buyers made the next push higher. With event risk coming up, here’s a quick adjustment to lock in profits.
Original Trade Idea: Ascending Triangle on GBP/AUD?
As I mentioned in the original trade idea, GBP/AUD did pullback to the moving averages, where it looks like the bulls took control and pushed the market higher. During the pullback, my bottom long order was triggered at 1.9500, after which I immediately closed my long order at 1.9700. And since then, both currencies played out in the directions I needed for this trade to be successful as the Aussie fell today while Sterling rallied (both without moving major catalysts).
So right now, I’m up about 270 pips, but on the forex calendar I see Aussie jobs data and the Bank of England inflation report coming up soon that can bring unknown volatility and direction to the mix. To avoid giving back my gains, but keeping myself open to maximizing my trade, I’ve decided to adjust my stop to 1.9700 to lock in about a 0.44% gain on this trade.
If the Aussie jobs data comes in weak and boosts GBP/AUD higher, I’ll likely close the trade down manually or adjust my stop once again ahead of the BOE inflation report as that event tends to be a downer for the British pound in this low inflation environment we’re currently in. With that in mind, I can just sit back now with profits locked in and a risk-free trade, and see where the markets take me. Stay tuned!