I shorted on what appeared to be a break below a double top neckline and channel support, just after Australia started printing weaker than expected leading inflation indicators. As it turned out, market participants focused their attention to U.S. election uncertainties and the selloff in U.S. equities later that week, forcing the Greenback to retreat across the board.
With that, AUD/USD climbed all the way up to the channel resistance I highlighted in this week’s Comdoll Trading Kit. Since I was already watching this pattern, I decided that I’d close early on the first sign of an upside breakout from the consolidation around the top of the channel. Not even the rebound in U.S. markets this week was enough to lift the Greenback against the Aussie, as risk appetite seems to be taking over.
Price busted out of the channel so I closed at .7675 for a 100-pip or 0.30% loss. Even though price is still well within the longer-term range I was initially watching, I thought that the potential volatility during the U.S. elections could still lead to large spikes here and there so it would be too much of a risk to keep it open.
I’ll be sitting on my hands and waiting for the election storm to be over, but I’ll still be watching price action once the results start coming in. Are you guys trading the elections or keeping positions open then? Don’t forget to check out our risk disclosure!