Thank goodness I rolled my stop up! I was able to lock in some gains on this AUD/USD trade even when the pair dropped like a rock. Before reading on, make sure you check out my initial idea.
The pair was already within striking distance of my profit target at the top of the ascending channel on the 4-hour time frame, but I had a nagging feeling that I had to make some adjustments to lock in gains in case a midweek reversal was brewing. Data from Australia had been coming in strong, but it turns out that renewed Fed rate hike hopes would prop up the Greenback then.
With that, my adjusted stop to .7650 was hit to give me a 35-pip gain or a 0.13% win on my account. That’s not so bad given how AUD/USD eventually tumbled below my entry at .7615 after the Chinese CPI missed expectations later in the week. Whew!
For now, I’m reassessing my bias on the dollar now that FOMC officials are giving mixed signals and market participants are trying to position ahead of the actual policy statement next week. I’m still slightly bullish on the Aussie because of the RBA’s preference to keep rates on hold for fear of bursting the housing market bubble and also because it’s recent reports have shown some green shoots.
Even China has had its fair share of upbeat reports earlier today, which could keep demand for Australia’s commodities supported, but I might need to pick a different counter currency this time.
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See also: Q2 2016 Trading Performance Review
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