Bah! So much for that breakdown! AUD/NZD is now back above that triangle support area so I think it’s time for me to cut my losses on this short position. In case you missed it, don’t forget to check out my initial trade idea.
I thought that the short-term triangle break on this pair below the 1.0800 handle would be enough to send it tumbling down to longer-term range support around 1.0400, but it looks like sellers aren’t that strong yet.
I was ready to hold on to this position even if price pulled back to the broken support, provided that it holds as resistance and allows the selloff to resume. However, Aussie bulls kept charging and pushed price back above 1.0800 so I got ready to exit early.
As for fundamentals, expectations of a stronger quarterly CPI reading from Australia and signs of improving growth conditions in China were also enough to boost the pair at the start of the week. Although the actual CPI reading came in a notch below expectations, Aussie bulls fought to hold on to their gains and barely made room for a drop.
With that, I decided to trim my losses by closing at market (1.0845) before the pair heads any further north and reaches my full stop at 1.0925. In retrospect, I probably should’ve waited for the top-tier Australian CPI report to be released first or trailed my stop down to lock in some gains when price had been moving in my trade’s direction last week.
Here’s what I ended up with:
P/L: -95 pips / -0.27%
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See also: Q1 2017 Trading Performance Review
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