Ugh, so much for bearish momentum! Price resumed its climb and took me out of this short EUR/AUD trade in the process.
Short EUR/AUD Trade
Just when it seemed the pair was ready to resume its slide after breaking below a long-term rising trend line, bulls returned with a vengeance and pushed it past the area of interest around 1.5850.
As it turned out, the Aussie was the weakest currency of the bunch on account of resurfacing trade tensions between the U.S. and China, as well as fresh concerns in emerging markets.
In retrospect, I do wish I had adjusted my stop lower when price appeared to break below the 1.5600 mark. However, that was still a bit too close to my short entry and at that time I wanted to give the trade some breathing room.
Unfortunately, the climb was nearly nonstop from there, as the euro took advantage of dollar weakness for the most part of the week. It didn’t help that Westpac’s home loan rate hike dampened expectations of actual RBA tightening, pushing the Aussie much lower.
With that, I’m out of my trade as EUR/AUD surged to my stop past the 1.5900 mark before I could even cut my losses. Here’s the damage:
P/L: -250 pips / -0.45%
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