Trade Review: AUD/USD Downside Momentum

Dollar traders are extra jittery this election week so I decided to just exit my short AUD/USD position before all hell breaks loose! Make sure you review my initial trade idea before reading on.

Short AUD/USD Trade

I shorted on what appeared to be a break below a double top neckline and channel support, just after Australia started printing weaker than expected leading inflation indicators. As it turned out, market participants focused their attention to U.S. election uncertainties and the selloff in U.S. equities later that week, forcing the Greenback to retreat across the board.

AUD/USD 1-hour Forex Chart

AUD/USD 1-hour Forex Chart

With that, AUD/USD climbed all the way up to the channel resistance I highlighted in this week’s Comdoll Trading Kit. Since I was already watching this pattern, I decided that I’d close early on the first sign of an upside breakout from the consolidation around the top of the channel. Not even the rebound in U.S. markets this week was enough to lift the Greenback against the Aussie, as risk appetite seems to be taking over.

Price busted out of the channel so I closed at .7675 for a 100-pip or 0.30% loss. Even though price is still well within the longer-term range I was initially watching, I thought that the potential volatility during the U.S. elections could still lead to large spikes here and there so it would be too much of a risk to keep it open.

I’ll be sitting on my hands and waiting for the election storm to be over, but I’ll still be watching price action once the results start coming in. Are you guys trading the elections or keeping positions open then? Don’t forget to check out our risk disclosure!



See also: Q3 2016 Trading Performance Review


  • Joan Mchardy

    Not sure why you would have shorted this pair. The Daily chart is showing the pair sitting on a upward support and hitting a clear resistance which has formed a flag pattern. It is at a point where it could make a break to either side as it has been squeezed to within and inch of its breath.

    • Yikes, I see what you’re referring to!

  • Ari

    Also check out iron ore price which since 28th october went up 20% in price. i wonder this also has some effect to AU

    • Yep, it usually does! This time around though, it seems that risk sentiment driven by the US elections has a bigger say.