It’s only been a couple of days but my AUD/USD short idea is already paying off nicely after a flip in global sentiment and economic data from Australia. Time for an adjustment!
Trade Adjustment: AUD/USD Short At Previous Consolidation
On Tuesday, I went short AUD/USD as it was testing a potential major resistance to play souring global economic data and risk sentiment. In just a couple of days, global risk assets took a hit as U.S./ China trade jitters return, Brexit setbacks arise, and additional pressure on the Aussie is likely on Australia’s weaker-than-expected 2018 Q3 GDP reading (+2.8% actual vs. an expected +3.3%).
AUD/USD quickly went from my entry at 0.7338 down to a low of just below the 0.7200 major psychological level in–one full weekly ATR move and roughly up over +100 pips– in basically two trading days.
So, this move lower is pretty much another gift and with major U.S. economic data ahead (monthly U.S. employment report) and support forming once again at the 0.7200 handle, I decided to take some profit and roll down my stop to my break even level:
Closed half position manually at 0.7213 and rolled down stop from 0.7530 to 0.7335.
Because I started with a nibbler position, this locks in only a 0.10% gain, but again, with major U.S. data ahead that’s okay for me because I am actually giving myself more flexibility for my next move and taking away some psychological pressure.
Going forward, I’m gonna wait to see what we get from the NFP report, which according to my main man Forex Gump, the probabilities are leaning towards downside surprises based on the leading indicators and historical tendencies.
This means a pop higher in AUD/USD could be in the works tomorrow, and if that occurs I will look to see about adding back to my position unless the data is crazy negative and/or geopolitical drivers shift back towards supporting risk-on market sentiment.
So that’s it for now as it’s back to “wait-and-see” mode, but stay tuned for potential adjustments and updates next week. And as always, remember to never risk more than 1% of a trading account on any single trade. Adjust position sizes accordingly. Create your own ideas and don’t simply follow what I do.
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