Abandon ship! Thanks to RBA Governor Stevens’ remarks on further rate cuts, GBP/AUD popped higher and I decided to exit my short forex trade early. Luckily, I managed to close this one at breakeven. Phew!
This pair actually had pretty good downside momentum goin’ on, as the U.K. printed a weaker than expected jobs report last week while China decided to cut its RRR over the weekend. The latter allowed the Aussie to start this trading week on a strong note since stimulus in China, Australia’s number one trade partner, could mean higher demand for commodity exports.
But as Pip Diddy mentioned in his U.S. Session Recap, RBA head Stevens said that monetary policy should remain accommodative, which is just a fancy way of saying that interest rate cuts are still on the table! He added that it was “very likely” for the Aussie to fall further, leading some forex traders to speculate that the RBA could start intervening in the currency market.
With that, I just decided to close this trade at breakeven since I’m starting to see a double bottom formation on the 1-hour forex chart. Price found support near the previous lows at 1.9100 anyway and I do wish I was able to lock in some profits around those levels. I’m still gonna keep close tabs on this pair though, as the BOE is set to print its MPC meeting minutes this week and could spark more moves.
Got any comdoll trade ideas you’d like to share with me this week?
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