Despite mostly sideways action since I entered, EUR/AUD found its way lower to retest recent swing lows. But with a potentially bullish catalyst coming up, it was time to take profits for now. Here’s my forex trade review.
As I had hoped, the break below the rising trendline drew in more sellers to this market. This was mostly fueled by continued European economic weakness, with the recent push lower fueled by RBA Governor Steven’s recent commentary that lacked dovish jawboning on the Aussie. I was able to get into my second half position on the way down at 1.4430 to get me into a full position.
But with the quarterly Australian CPI report coming up later, I decided it was time to adjust. Australian inflation has been in a downtrend since October 2013, similar to what we’re seeing across the globe, and since the reaction to past reads has been negative, I think the probability is good we’ll see something similar today. So, I decided to close manually at 1.4338 to lock in profits for now.
First half: +173 pips
Second half: +92 pips
Total: +132.5 pips/ +0.66% gain
Exiting the trade doesn’t mean I’m no longer bearish on the pair, I’m just taking this event as a potential opportunity to lock in profits and hop back in at a better price if the pair bounces higher.
In retrospect, I could have entered the second half of my position when the market found resistance once again at the intersection of moving averages and the Fibonacci retracement area. It was pretty good reversal signal that sellers might take notice, so it was an opportunity missed to scale in at a better price. Besides that, I think I executed pretty well given the data both seen and yet to be seen.
That’s it for now but I’m going to keep watching for a potential re-entry after the Aussie data coming in a just a bit. Stay tuned!
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