A few days back, I took a simple retracement play on AUD/USD, as the pair pulled up to a broken support zone. Here’s how it turned out:
DING! DING! DING! DING! DING! We’ve got a winner!
Although I must admit that I shorted a wee bit early at the .8700 mark and could’ve waited for a higher retracement to .8750, I’m still happy with how the trade turned out. Resistance at the Fibs and broken support zone held like a boss, eventually pushing the pair down to its previous lows.
I did worry about that PBoC rate cut though, as it provided some reassurance that Chinese demand for Australia’s commodity exports could stay afloat. However, the rally quickly fizzled as forex traders took this as a sign that officials are finally admitting that China is in for a slowdown.
With that, I managed to score some decent pips on this short trade. Here’s what I have:
P/L: +150 pips / +1.50%
Other Popular Articles:
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.