AUD/CAD has been a stubborn one since entering short, and with another failed attempt to break lower, I’ve decided to close the trade down. Here’s a quick review.
AUD/CAD Range Resistance to Hold?
At the beginning of November, I decided to short AUD/CAD at the top of a range to play my fundamental bias favoring the Loonie (a relative economic out performer/no expectations of rate cuts) over the Australian dollar (expectations of further rate cuts).
Since triggering my short orders at 0.9090, the bears have made several attempts to push the market lower, but strong support has always come at the major psychological level (0.9000) to push the pair back to the top of the range.
This week, we’re seeing another rejection of the bears at that major support area, despite dovish commentary from the RBA meeting minutes indicating rate cuts are still on the table earlier in the session. It’s also probably not helpful that recent Canadian economic updates haven’t been as positive as the recent past (Canadian unemployment rate rose by 0.4 percentage points to 5.9%, Manufacturing sales declined 0.7% to $57.1 billion in October)
So with the economic picture shifting for Canada and the strong support area holding, I’ve decided to close the trade down manually at market (0.9017):
Total: +73 pips / +0.13% on 0.50% max risk
While this was a profitable trade, I wasn’t too happy with this one. I probably could have added more to the position on every tick above the range, but then again, the data from Canada was turning a bit sour, making it harder to size up more. Also, I was probably in this trade way too long, and should have closed out earlier in the month on the last retest of the 0.9000 area, after the weak Canadian jobs numbers.
Overall, it was a good trade, but it just wouldn’t go my way. I’m still bearish on AUD/CAD fundamentally for now, and I may re-short the pair if the market does retest the top of the range and reverse once again, this time structuring for the new, tighter range.
So, stay tuned for that, and until then thanks for checking out my blog! Good luck and good trading!
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