Canceled Open Orders: 2013-12-10 23:05
Alas, AUD/CHF never looked back! The pair just kept grinding lower last week until it found support around the .8100 handle. I think it’s time for me to stop waiting for a retracement and just move on.
I probably should’ve just jumped in the break of .8200 when I had the chance! But then I was never really very comfortable about catching breakouts so I thought I’d be better off waiting for a retracement instead.
At the moment, the pair is moving sideways, as though waiting for a catalyst from either Australia or Switzerland. As Forex Gump mentioned, the Australian employment figures are up for release tomorrow so I’ll definitely figure out how I can trade that event. For now though, I’ve canceled my open orders on AUD/CHF as I hunt for my comdoll trade this week. Got any ideas you’d like to share?
Trade Idea: 2013-12-04 21:49
Thanks to the helpful feedback on my NZD/USD trade idea, I was convinced that I should give franc pairs a shot since these seem to be showing clean ranges these days. From my observation, it appears that NZD/CHF and AUD/CHF react to psychological support and resistance levels as well so I decided to hunt for potential trades with these pairs.
I’m feeling very bearish on the Australian dollar because of RBA jawboning and Australia’s weaker than expected GDP release. These events were enough to trigger a strong break below .8200 for AUD/CHF, but I think that the pair might still retrace to this level before resuming its drop.
As you can see from the chart below, the .8200 mark lines up with the 38.2% Fib and the broken support level. In fact, this support zone has held up quite well in the past few months so the recent breakdown could be a sign that bears are ready to push this pair lower.
Another reason why I picked AUD/CHF was that I was iffy about playing a dollar pair for this week. After all, we’ve got a bunch of top-tier data lined up and it’s tough to tell how the dollar could trade, particularly during the NFP release. I didn’t want to short Aussie against the yen either, as the Japanese currency is still under heavy selling pressure.
Earlier today, Australia reported a weaker than expected trade balance, showing a deficit of 0.53 billion AUD versus the estimated 0.38 billion AUD shortfall. RBA officials might take this drop in trade activity as an opportunity to blame Aussie strength for the slowdown in exports. Looking ahead, there are no other reports due from Australia for the remainder of the week so I’m inclined to think that traders will stay reluctant to buy the Aussie.
Here’s my plan:
Short AUD/CHF at .8200, stop loss at .8300, initial profit target at .8000 for a 2:1 reward-to-risk.
I’ll be risking 0.5% of my account on this trade and I’ll consider adding to my position or adjusting my profit target lower if there are any factors that support a stronger selloff. I’ll keep y’all posted!
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