Both GBP/JPY & AUD/CAD have made some moves in the last couple of weeks, so it’s time for a quick update and adjustments into the new month of trading.
Fib Short on AUD/CAD
As we can see in the four hour chart above of AUD/CAD, the market has pretty much gone nowhere since I rolled down my stop on my remaining position from 0.9430 down to 0.9220. The Aussie seems to have benefited from the improving U.S.-China trade rhetoric and central bank easing stories, cancelling out the gains the Loonie has been seeing thanks to improving oil prices and global risk sentiment. So, it’s been chop city for the pair over the last week or so, and it couldn’t even gain momentum again after today’s RBA interest rate cut.
With the market not set to go anywhere, the RBA hinting at holding off from any kind of interest rate moves for now, and with Canadian jobs and the BOC monetary policy coming soon, I decided to close the remainder of my position out at market (0.9158).
Total: +123 pips / +0.605% gain on 0.50% risk
That’s a pretty good return-on-risk for a one month hold, so I’m pretty happy with the trade overall. I probably could have started off with the full 1% risk, but as I mentioned in my original trade idea, the pair had already made a pretty strong move lower so it was within my risk tolerance to start off with the nibbler position.
Downtrend Bounce in GBP/JPY
Guppy has also been a choppy mess since scaling into a short position over the last couple of weeks. While Sterling has been under pressure thanks to weak economic updates & Brexit / new PM drama, the Japanese yen has been out of favor as the Bank of Japan signals willingness for further stimulative measures. During this time, the Fibs up to 137.50 have held off the bulls after several retests, while 136.00 has developed into strong short-term support the last two times it was tested in June.
Well, we’re back to that support area once again, and with the odds of more choppiness ahead and strong support at 136.00 still a legitimate concern, I’ve decided to lock in some profits here. Here’s what I did:
Closed 2/3 of position at market (135.98), rolled stop down from 138.20 to 136.80
This adjustment locks in a 0.39% gain on my original 1.00% max risk, while creating a “risk-free” trade as my stop is now at my average entry price of 136.80. And I’ve decided to remove my max target at 135.00 for now in case the pair can break below the current support area and gain momentum, a situation that may occur if the odds of a no-deal Brexit continue to grow as it did today after Bercow blocs plan to prevent the potentially chaotic exit from the EU.
That’s it for now but I’m wondering what do you guys think? Did I make the right moves or adjustments? Let me know in the comments section below!
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