Decided to closed down my open Aussie trades for a profit ahead of top tier Australian data. Here’s a quick review!
Trade Review: Short AUD/NZD
Way back at the beginning of November, I decided to short AUD/NZD to play my fundamental bias of the Kiwi over the Aussie and a descending channel pattern on the one hour timeframe.
As we can see on the four hour chart above, the pair went into consolidation mode for a while, bouncing between roughly 1.1000 to 1.1100, before breaking lower on what was likely a bullish Kiwi move on Acting RBNZ Guv’nah Spencer’s comments on inflation and interest rates and once again this week with the announcement of Adrian Orr as a the new governor of the Reserve Bank of New Zealand.
I’ve gotten some nice gains on the trade, but we’ve got the Australian jobs data coming soon, and with an expectation of a jump in net job gains, I think it’s a good time to take profit. So, I closed today at market (1.0899) to lock in my gain:
Total: +151 pips / +0.38% on 0.50% risk
I’m still fundamentally bearish on the Aussie versus the Kiwi, so I’m still interested being short on this pair. Once we get the Aussie jobs and it’s not insanely great news, I think I’ll re-enter, especially if the market pops higher into the previous consolidation area.
Trade Review: GBP/AUD Upside Breakout
My long trade on GBP/AUD doesn’t go as far back as my AUD/NZD short above and didn’t play out as well, mostly because of trade management and not the market going my way.
Originally, I went long on my fundamental bias of Sterling over the Aussie, and on a pullback to a broken consolidation, and fortunately other traders saw this as a buying area as well.
The market shot up to just about testing the 1.8000 major psychological handle, where sellers took back control, possible when we started getting cold water on positive Brexit sentiment with cautious commentary from Michel Barnier, the E.U.’s chief Brexit negotiator last week. Sterling has been back pedaling since then and now my GBP/AUD trade is pretty much back to where it started.
Again, with the Aussie jobs data coming up and looking to beat the previous month’s read, I decided to close this at market (1.7640) for basically a scratch and re-assess after the event:
Total: + 35 pips / +0.048% gain on 0.50% risk
Technically, this pair is still in an uptrend, but with the recent Bank of England rate hike and inflation going stronger thank the BOE would like, I’m less bullish on Sterling as the BOE will have to take action to slow down the economy. Plus, after a strong move in GBP/AUD from September to now, going from 1.62000 to 1.8000 (around 11.00% move), odds are to me that we could be seeing a legit short-to-medium term double top at the moment…so I’ll likely stay away from the pair for now.
Overall, two winners and the average return-on-risk is pretty decent, so I’m happy on the trades, but I probably should have closed out or locked in more profits on GBP/AUD when it tested the 1.8000 area and failed. Other than that, I don’t think there’s anything else I could have done differently.
With that said, all I have left are orders to buy USD/CHF but I’ll do a little bit more re-assessment this week and decided whether to close out my orders or re-adjust my entry. Stay tuned!
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