Forex Trade Review: GBP/AUD Descending Channel

Ho humm… Watching this trade setup has been as exciting as watching water boil so I just decided to grab my profits early. If you’ve read my initial short GBP/AUD forex trade idea, you’d recall that I was able to hop in after a bounce off the descending channel resistance on the 4-hour time frame.

Since then, price has flip-flopped around the upper half of the channel, unable to find enough bearish momentum for a strong downside break. Even though BOE head honcho Carney recently shared their shift to a more downbeat stance, the British pound’s losses against the Aussie were limited because Australia was also facing weaker economic prospects due to the drag from China.

GBP/AUD 4-hour Forex Chart

GBP/AUD 4-hour Forex Chart

The pair broke below the mid-channel area of interest when higher-yielding currencies staged a quick rally towards the end of last week, but it looks like the risk-off vibes are returning this week. With that, I just decided to exit this trade early and lock in whatever tiny profits I had. Australia has its quarterly CPI report coming up anyway, and I’m thinking that a weak reading might lead to another GBP/AUD rally.

Here’s what I got:

P/L: +170 pips / +0.05%

I was only able to risk 0.25% on this short forex position since my second short order at 2.1000 wasn’t reached. Still, I ain’t complaining about these teensy gains! I’ll just have to find a better forex setup this week and I look forward to hearing your ideas.

Cheers!

Happy time

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