IF IT DOESN’T FEEL RIGHT THEN IT PROBABLY ISN’T; TRUST YOUR GUT
I’m not going to spend a lot of time on this one but if it doesn’t feel right then there is nothing wrong with getting out of a trade. We had shorted Aud/Usd on Friday at 0.7645 and after seeing some decent downside follow through on Monday, the market shot back up to our entry level on Tuesday. We took a quick look at some of the other markets, including Eur/Usd and Gbp/Usd and saw there were some key levels that still needed to be tested above in the respective majors. As such, we were inclined to exit the position at break-even and stand aside until a more attractive presented. Additionally, we were already exposed to the USD with our correlated long Usd/Cad trade and felt it might be a good idea to lighten up on our USD exposure given the recent price action. We are long Usd/Cad at 1.1540 with stops at 1.1540.
Written by Joel Kruger, Technical Currency Strategist for DailyFX.com
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