About Art of the Chart

Art of the Chart Author I'll be scouring the charts for "actionable masterpieces". These will be signficant chart patterns or set-ups that I feel are not only tradeable, but also have a high probability of making big profits with little risk. Whenever I spot an "actionable masterpiece", I will post an annotated chart (my chart art) along with an explanation. My goal is to help you learn how to spot these low ocurring but highly profitable "actionable masterpieces" yourself.

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July 2007

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Sell AUD/USD

Posted 13:29 12 July 2007 by Forex Ninja

The Aussie pair has pushed past 8650 but I believe it will face stiff resistance at these levels in the short-term as traders with long positions reduce some of their positions.

Australia released weaker-than-expected employment data with the unemployment rate rising to 4.3% from 4.2% and employment holding at 2,500 for June. Consumer inflation expectations also fell in the latest survey. These "crappy" data will soften expectations of another interest rate hike with market expectations of an August increase falling below 30%.

Reduced rate hike expectations is bearish for the Aussie dollar and a near-term correction doesn't seem far-fetched yo.

I've spotted bearish divergence with price making higher highs while the oscillator isn't.

AUD/USD, 4-Hour

I'm shorting now at 8650. My stop loss (SL) will be 8680. My initial profit target (PT) will be 8575.

Short AUD/USD @ 8650 | SL: 8680 | PT: 8575

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Comments (3)

That AUDUSD is crazy reaching new highs every month it seems. I remeber back in early april I thought it couldn't possibly get any higher and I was predicting reversal back then, since it was at all time highs, but It is so much higher now. I should have bought back then and stayed in this thing, because it seems like it hasn't had much of downtrend at all within the last few month just spikes here and there, but it always seems to go back up. AUD has been extremely strong
jpartridgexyz | Posted 16:48 13 July 2007
As long as the carry trade continues, as long as the USA equities performing well, then people will continue to snatch at the AUD as a carry trade candidate and sell the USD also at the same time. So why not stay with the trend and go long, at least there's possibility of a swap on a daily basis, and some appreciation. So I'd favor a long with the USD until the markets get ill from the subprime mess and the equities go sour from higher interest rates.
mdetlh | Posted 20:39 15 July 2007
As long as the carry trade continues, as long as the USA equities performing well, then people will continue to snatch at the AUD as a carry trade candidate and sell the USD also at the same time. So why not stay with the trend and go long, at least there's possibility of a swap on a daily basis, and some appreciation. So I'd favor a long with the AUD until the markets get ill from the subprime mess and the equities go sour from higher interest rates.
mdetlh | Posted 20:40 15 July 2007

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