I really wished I wouldn’t be starting the year off with a loss, but I think it’s better for me to jump out of this short AUD/USD trade and move on. Here’s what happened.
I was watching the confluence between the Fibs and the area of interest around the descending channel resistance on the pair’s 4-hour time frame, thinking it would be a good spot to enter a short position. But the odds weren’t in my favor with this one, as price broke above the top of the channel to indicate that the downtrend might already be over.
Because of that, I just decided to close early and accept the losses before the pair heads much further north. Improved outlook for the Chinese economy and another round of gains in iron ore prices could boost AUD/USD past the swing high and all the way up to my stop loss anyway. Chinese GDP and Australian jobs data are still up for release, and strong results could also spur gains for the Aussie.
Besides, the Greenback is looking pretty nervous at the moment since Trump’s inauguration is coming up. I don’t really want to be holding on to a long dollar position ahead of a potentially volatile event. Given how his first presser turned out, I’m inclined to just stay on the sidelines instead.
P/L: -120 pips / -0.27%
How about you? Are you keeping any dollar trades open until the end of the week? Don’t forget to check out our risk disclosure!
See also: Q4 2016 Trading Performance Review
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