‘Twas a pretty solid start for me this year, as my decision to re-enter my short AUD/JPY forex position from last month allowed me to bag more pips from my bearish bias!
As I’ve mentioned in my trade idea blog post, I decided to hop in on a break of the head and shoulders neckline around the 86.00 handle and set my sights on the 83.00 support area. And thanks to the overall risk-off sentiment in the financial markets, combined with downbeat Australian economic releases earlier today, the pair eventually hit my profit target.
Since I had a wide stop at 89.00, I only managed to make a 1:1 return-to-risk on this forex setup… but I ain’t complaining! Not bad for a short-term trade, eh? Here’s how it all turned out:
P/L: +300 pips / +0.50%
Given the current mood of Mr. Market, I’m still bearish on the Aussie and bullish on the yen. The Chinese economy hasn’t been looking too good lately (again!) and it’s starting hurt their equity markets, possibly weighing on Australia’s longer-term growth prospects as well. Do you think this pair could fall much further? I’d love to get your thoughts on this!
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