Australia’s quarterly CPI came in line with expectations of a 0.4% rebound so that’s my cue to close this AUD/USD short position. Before reading on, make sure you check out my initial trade idea here!
The Land Down Under also printed a stronger than expected trimmed mean CPI of 0.5% for Q2, which might be enough to weaken RBA rate cut expectations next week. As Forex Gump mentioned in his Australian CPI preview, the central bank is keeping close tabs on these inflation figures to gauge whether or not they need to ease policy again.
For now, it looks like the latest batch of CPI readings could be enough reason for the RBA to sit on their hands, especially since they’re also a bit worried about the potential repercussions of a rate cut on the booming housing market. Because of that, I’ve decided to cut my losses on this short setup and close at market (.7550) when price seemed to move back above the trend line.
Here’s what I ended up with:
P/L: -75 pips / -0.11%
I hope I won’t regret this decision to exit early, but I think I’d rather be safe than sorry. Besides, the FOMC statement is coming up in today’s U.S. session so additional volatility could still come into play and I prefer sitting on the sidelines during those event risks.
How about you guys? How are your comdoll trades doing this week? Don’t be shy to share your market thoughts and trade ideas in our comments section below!
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