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It looks like my adjustments to lock in some profits was the right move on AUD/CAD after fresh catalysts, especially from the RBA meeting minutes, sent the pair rallying higher.

AUD/CAD Downside Momentum

AUD/CAD 4-Hour
AUD/CAD 4-Hour

A couple of weeks ago, AUD/CAD hit my initial short target at .9800, at which point I decided it would be a good idea to lock profits and reduce risk because of the upcoming Bank of Canada monetary policy meeting.

Well my fear of unexpected market behavior played out as the Loonie rally after the hawkish BOC meeting was extremely limited and AUD/CAD actually rallied after the initial spike lower; .9800 held like a champ once again!

Afterwards, I decided to hold on to my remaining position thinking the bounce higher could faded, but this week proved wrong. Thanks to a surprisingly hawkish set of Reserve Bank of Australia meeting minutes, sending Aussie sentiment into strong rally mode. Needless to say, the reaction was strong and it sent AUD/CAD another handle higher to touch 1.0000, where my remaining position was closed at breakeven:

1st Half: +167 pips
2nd Half: Breakeven
Total: +83 pips average/+0.23% gain on 0.50% risk

So, it was a nice return-on-risk that only took a month to play out, but of course, I could have done a little bit better. Mostly, I think closing all the way ahead of the BOC event would have been a better move, especially after seeing the bounce off of .9800…but then again, that’s hindsight trading. Without hindsight, I think I made the right moves and I’m still able short AUD/CAD once again with a little bit of cushion and a better price if the trend lower continues.

That’s it for now but stay tuned for potential adjustments to my remaining positions (EUR/JPY long & NZD/JPY short), which may come after we see if anything goes down with the Bank of Japan and European Central Bank monetary policy statements coming soon.  And as always…good luck and good trading!

This content is strictly for informational purposes only and does not constitute as investment advice. Trading any financial market involves risk. Please read our Risk Disclosure to make sure you understand the risks involved.