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AUD/USD just triggered my long orders, but with the main driving themes and sentiment shifting swiftly in the past few sessions, I took today’s bounce as an opportunity to close out for a profit. Here’s a quick review!

AUD/USD Uptrend Play

AUD/USD 4-Hour Forex Chart
AUD/USD 4-Hour Forex Chart

Last week, I decided to put on some risk to play the “reopening theme” that has been driving traders into risk assets over the past month, going with the strong momentum higher in AUD/USD. And given the strong move higher, I went with a more conservative entry strategy of waiting for a pullback before going long.

Well, the past few session has brought on a pretty strong round of risk aversion sentiment thanks to rising coronavirus cases sparking fears of a second wave. This brought AUD/USD down to and triggering my order entry at 0.6800 to put me in long with 0.50% max risk.

But it seems traders have shifted back to happy vibes on the session, thanks to an announcement from the Federal Reserve that they will start buying individual corporate bonds. The market went from deep red early in the U.S. trading session to big gains in no time, with AUD/USD gaining around +140 pips (around 2.20%) from the session lows.

So what now? I think the main driving theme will continue to be coronavirus updates, and with cases on the rise, I think traders will likely lean more towards risk-off than risk-on.  This Fed induced bounce came at just the right time for me to shift my bias with a profit, as I decided to close out my AUD/USD long position manually (0.6919), for a solid one session return-on-risk!

Total: +119 pips / +0.27% gain on 0.50% risk taken

Overall, I don’t know if this was the right adjustment, but again, I think the tendency will be for some profit taking from the “reopening theme” bounce if cases continue to rise. If that story changes where cases fall again, then I’ll look for another long position in AUD/USD.

Stay tuned for that update if it comes, 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.

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.