The AUD produced one of my favourite setups. When the AUD couldn’t take out the Asian session high after an active Asian session, we enter and attempt to get to the low of the Asian session. As price moves lower we take the risk out of the trade and begin to lock in profits.
Ideally we want the AUD to drop to our Target 2 level, but it must make it through the Asian session low, yesterday’s low, and Target 1 before that can happen. Price is likely to test and retest the Asian session low and yesterday’s low before dropping further. As it approaches the Asian session low, buyers enter.
I am very opposed to giving back too many pips of profits, so instead of waiting for price to go a few more pips to the Asian low, as it begins to pull back, I lock in 35 pips…which is still a nice move to capture to end the week.
It’s been an interesting week with the market digesting Mr. Bernanke’s FOMC remarks.
Enjoy your weekend!
Back Tuesday if we find a trade.