I don’t seem to be seeing as much action as I hoped on this AUD/CHF long position so I’ve decided to just take my profits and run. In case you missed, it make sure you read my initial trade idea and latest update first.
I was able to hop in at market on what appeared to be a rising wedge breakout at .7725, setting my initial target at the next area of interest at .7875 and my stop back inside the wedge at .7525. I thought that the upside breakout was a sign that Aussie bulls were ready to charge, possibly taking price close to my target in just a few days.
However, bullish momentum seemed to be weak even after Australia printed a stronger than expected 1.1% growth figure versus the estimated 0.7% expansion for Q4. The pair also barely made any headway after China’s manufacturing PMI reports came in better than expected, probably because Switzerland has been seeing its fair share of upbeat data recently as well.
The candlesticks on the weekly time frame are reflecting a lot of hesitation at this point so I’m thinking that the pair needs to make a correction to the broken wedge resistance before heading further north. Besides, stochastic is indicating overbought conditions on this long-term time frame and is starting to cross lower so sellers might take control from here.
Because of that, I just decided to lock in whatever gains I had and wait for a better entry point to go long. After all, I’ve already got a short EUR/AUD position running and this one’s pretty strongly correlated to that trade anyway. Here’s what I got:
P/L: +10 pips / +0.025%
I know it’s a measly win, but it’s a win nonetheless! While fundamentals are in the Aussie’s favor right now, the rally is showing signs of exhaustion and I might be better off putting my moolah in another pair that could see stronger momentum. Got any ideas you’d like to share?
As always, don’t risk more than 1% of your account on a single trade and make sure you read our risk disclosure if you’re thinking of taking the same setups.
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