An update on my AUDUSD trade that kicked in last week
AUDUSD is hovering around the old 2 year resistance level but a lack of a bounce is worrying. I highlighted the 0.7700/60 area last week as a place I’d look to build a technical long and I’m in at my first entry level at 0.7760.
At the moment the price action isn’t very encouraging as sellers are hitting every rally towards 0.7800, since we broke below late last week.
The flipside is that support is holding but the PA looks like resistance is stronger than support. I’m not giving up on the trade at all, and it’s still very early days as I only got in late last week but reading the price action is one of the most important exercises and if it’s saying something, you’d better be listening. At the moment I’m a bit more cautious of the trade so I’m going to scale down my next entry (which I missed by a whisker on Friday), at 0.7730. I’m also going to try and ‘job’ the position by getting out of half the trade on rallies to 0.7780/0.7800, and then adding back on the dips. 0.7760 was my first entry but we seem to have moved down to 0.7750 as intraday support, so I’ll look to add back at 0.7755-ish, on the next up & down.
My additional caution comes on top of my original concerns that even though I like the trade technically, it is going against the current down trend, and that’s weighing on my thoughts. Reducing my trade size just makes me feel more comfortable, even if it risks me potentially not taking as much profit if we go back up. That’s not so much of a problem for me beacuse I’d rather be right and make a little, than be wrong and lose a lot.
Back to chart watching then and we’ll see what the aussie wants to do with this new 0.7740/80 range.