Alas! I got stopped out on my EUR/AUD short faster than I could say “weak Australian CPI”!
As you can see from the chart below, the pair made a sharp upside break when the quarterly Australian CPI figure was released. The actual report showed a 0.6% increase in price levels, slower than the estimated 0.8% rise. As Forex Gump mentioned in his article on what the weak Australia CPI means for RBA policy and the AUD, subdued inflationary pressures could lessen the pressure on the Australian central bank to hike rates in the coming months.
Never mind that euro zone PMI readings also showed signs of weakness! Aussie bulls were far too disappointed with Australia’s bleak CPI figure that they pushed EUR/AUD all the way up to the 1.4900 mark, hitting my stop at 1.4850 along the way.
With that, I chalked up a 0.5% dent on my account and a 100-pip loss. Too bad it erased most of the gains I scored on my NZD/CHF long trade earlier this quarter! So now I’m back to square one, hoping to snag a really good win in trading commodity currencies. Got any ideas you’d like to share?
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