Trade Update: 2013-07-16 1:27
What a fakeout!
Last week I was counting on a break of a rising trend line, a potential double bottom, and better-than-expected Australian employment numbers to spur on the Aussie rally.
As it turned out, the Aussie bears aren’t done selling just yet! Traders finally decided that the FOMC statement is dollar bullish after all, which weighed heavily on AUD/USD in the later trading sessions.
This is only my first trade for the quarter, so I can still shrug off this first punch like a boxer and continue to fight. On my next trades I’ll remember to be more flexible and maybe wait for more confirmation before entering a trade.
How about you? Do you have any hard-earned trading lessons lately?
Trade Idea: 2013-07-11 3:30
Here’s my very first trade for the quarter, fellas!
Thanks to this week’s Featured Trade, I was alerted to the double bottom chart pattern that formed on AUD/USD recently. Since the pair broke above the formation’s neckline after yesterday’s release of the FOMC meeting minutes, I’m thinking that the Aussie could be on a bull run from now on.
On top of that, AUD/USD also broke above the long-term falling trend line and is moving closer to breaking above the 200 SMA on the 4-hour time frame. I’ll be jumping in the potential uptrend at market with half my usual position size then I plan to add to my position once the rally shows more momentum and breaks above the 200 SMA.
As for fundamentals, things are looking a little brighter for the Aussie today, as Australia just printed better than expected jobs data. The employment change figure showed a 10.3K increase, higher than the estimated 0.3K rise in hiring, although the jobless rate inched up to 5.7%.
I’m expecting the U.S. dollar to keep selling off for the rest of the week, as the disappointing Fed meeting minutes convinced traders that the Fed’s stimulus taper schedule isn’t a done deal yet.
Once again, I’d like to thank Blindfoldedmonkey for pointing out the reversal patterns on AUD/USD and NZD/USD. Don’t forget to check out our risk disclosure if you plan to jump in with me. Think this trade setup will work out?
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