Everything was looking good for my AUD/NZD short going into the weekend, but the Australian elections threw a wrench into my plan that forced me to exit pretty early. Here’s a quick review.
Closed: Support Break Ahead on AUD/NZD?
Last week I was expected a bearish move in the Aussie ahead of Australia’s jobs data, and played that through AUD/NZD as it has fallen since double topping around 1.0700 and forming a neckline around 1.0550. Well, Australia printed another rise in unemployment and the Aussie stumbles, and AUD/NZD did manage to break the neckline to trigger my short orders at 1.0520 with 0.50% risk.
Unfortunately, this past weekend’s Australian elections garnered a bullish reaction from traders as the polls got it completely wrong with the incumbent government sticking around for a little while longer. AUD/NZD gapped higher to open to trigger my stop order at 1.0575, but slipping quite a bit to actually close my trade out at 1.0598 for a bigger-than-expected loss.
Total: -78 pips on avg / -0.70% on 0.50% risk
It’s still a small loss, but kind of bites a little bit given that I probably should have closed the trade down ahead of the elections. But given the weak jobs data that likely means an RBA cut pretty soon, and the market holding below the neckline, I thought I had enough cushion since the market was more than a daily ATR away from my stop going into the weekend. I was wrong and it’s definitely a lesson learned (i.e., avoid weekend elections) that cost me an extra 0.20% risk.
Overall, I’m still bearish the Aussie with the RBA likely to cut this year and U.S.-China trade tensions still in play, but I’ll be looking for a different counter currency to more directly play these two themes going forward.
That’s it for now. What do you guys think of how my trade played out? Let me know in the comments section below!
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