It looks like a reversal is in order so it’s time to jump ship! Here’s why I decided to cut my losses by exiting my short AUD/USD forex position early.
As Pip Diddy mentioned in his Asian session recap, Australia printed a couple of stronger than expected figures, followed by a not-so-dovish RBA statement. While the central bank just kept interest rates on hold at 2.00% as expected, Aussie bulls came out to play when Governor Stevens changed a few key phrases in their official statement. As it turns out, he said that the Aussie is already adjusting to falling commodity prices instead of emphasizing that further depreciation is both likely and necessary.
Because of that, AUD/USD popped up from the support around .7300 and rallied back above my entry price. I just decided to close my trade manually, thinking that European and U.S. forex traders would still react to the latest economic events in Australia and push the pair even higher. I’ve also cancelled my pending short orders at .7350 as well.
Fortunately I’ve only risked 0.25% of my account on this position so I’m looking at a small 0.12% loss (-70 pips) from this trade. Not too bad, I suppose. Besides, my current long position on GBP/CAD is making up for this loss and more!
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