Put out a few cross currency pair ideas over the past few weeks and after some pretty big moves, it’s time for an update and adjustments. Check it out!
Orders Closed: GBP/NZD Pullback Long Setup
Back when I posted my trade idea to go long GBP/NZD, Sterling was rolling higher off of the falling probability of a no-deal Brexit scenario happening. Unfortunately, that sentiment shifted the very next week as it looked like a no-deal Brexit is still very much a possibility, at which time I decided to close my long orders at 1.9000 because the main driver to Sterling price action changed.
Today, it still very much looks like the EU is not wanting to make changes to the deal made with British PM Theresa May back in 2018, so I have no inkling to go long Sterling any time soon. In fact, I’m watching the 1.9000 for a retest and see if the bears are still in control for a possible short position.
Orders Closed: GBP/AUD Momentum Lower
As mentioned above, Sterling bears took over big time at the end of January, where I looked to short GBP/AUD if there was a bounce to the minor area of interest around the 1.8200 handle.
For the same reason why we saw strong selling in Sterling pairs and why I closed my GBP/NZD orders, I closed my GBP/AUD short orders on the idea that 1.8200 wouldn’t be seen again for a while, making the move after that spike lower thanks to U.K. manufacturing PMI data hitting a three month low.
So, no short trade on GBP/AUD, and after the RBA basically opened the door to interest rate cuts if Australian data gets worse, I’m no longer interested in being long Aussies at this time.
Trade Update: AUD/CAD Resistance Held on Retest
Way back in mid-January, I decided to sell short AUD/CAD at market (0.9506) to play the downtrend and my fundamental bias of Loonie over the Aussie.
So far it’s worked out nicely as the broken support level around 0.9570 has held as resistance since entering the trade. And as mentioned above, the Reserve Bank of Australia is open to the idea of cutting interest rates if needed, so I’m definitely looking to ride the trend lower.
For now, I’m not making any changes to this trade as I want to see what happens with this week’s Canadian jobs data. If it turns out to be bullish for the Loonie and AUD/CAD drops, then I’ll watch the 0.9300 handle to possibly roll down my stop and add to my position to maximize my potential gain.
If the event turns out to be bearish for Loonie and AUD/CAD pops higher, I’ll make an assessment on the following price action to see whether it makes sense to stick with the short bias and add to the position or close it out together.
So stay tuned for that and as always, good luck and good trading!
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