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Faked out! So much for trying to catch a short-term triangle breakout during the release of Australia’s CPI. Here’s why I decided to cut losses on this AUD/NZD trade.

In case you’re wondering what I’m talking about, make sure you review my initial AUD/NZD trade setup and my fundamental arguments for entering a long position first.

You see, I was trying to catch a continuation from an earlier bullish move, but the rally past the triangle resistance wasn’t sustained. Heck, the price even turned around and broke below the pattern’s support instead!

AUD/NZD 1-hour Forex Chart
AUD/NZD 1-hour Forex Chart

In retrospect, I probably should’ve set my buy stop order farther away from the triangle resistance, but the price was treading close to the triangle support ahead of the AU CPI release so I thought an entry past 1.0700 would be enough to confirm a break higher.

I might’ve been better off watching the initial price reaction first before trying to see if the actual results were enough to dampen rate cut hopes and boost the Aussie.

Also, I could’ve cut losses earlier when price fell back inside the triangle formation but I was busy working on something else then. By the time I checked back in my trade platform, I noticed that price was already starting to break below the 1.0625 area so I decided to close early instead. Here’s the damage:

P/L: -125 pips / -0.25%

Got any trade ideas that could help me bounce back this week? 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.

This content is strictly for informational purposes only and does not constitute as investment advice. Trading any financial market involves risk. Please read our Risk Disclosure to make sure you understand the risks involved.