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.
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.
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