AUD/USD: Waiting for Parity – Trade Closed

Swing Trade Closed: 2011-09-26 07:34

Support at parity? NOPE! For the gazillionth time in a row, AUD/USD gave me another heartbreak, and this time it even added a well-deserved slap in my face. That will teach me not to be too confident on my setups!

AUD/USD Swing Update

Almost right after my order at 1.0000 (parity) got triggered, AUD/USD fell sharply in the charts and hit my tight stop loss at .9950. As it turned out, no amount of technical support could make the Aussie bulls attack when fears over the euro zone debt crisis and the disappointing FOMC statement are dominating risk sentiment.

I know my fundamental and technical setups were sound at the time, so where could I have minimized my losses on this trade? Short of taking profits after only a 5-pip gain, I almost have no idea on how I could have done better. Any tips? I’ll be in touch in one of the links below:

@Happy_pip Twitter
Playing with Comdolls Facebook page
Happy Pip Comdoll Corners
MeetPips.com

Thanks and looking forward to your advice!

Happy time

Swing Trade Update: 2011-09-22 03:36

Could it be? I finally caught a move from parity. Is this my chance to profit from the Aussie? If you liked that short rhyme, you also might like my swing trade setup!

AUD/USD Swing Update

Thanks to the Fed‘s announcement of “Operation Twist”, the Greenback rallied just enough to trigger my entry order for AUD/USD. It seemed that the markets were relieved to find out that the U.S. central bank wasn’t gonna implement QE3, even though there were plenty of doubts that “Operation Twist” would be enough to save the U.S. economy.

With that, I’m thinking that the strong dollar-buying that we saw yesterday was merely a knee-jerk reaction to the news. If that’s the case, AUD/USD could recoup its losses from yesterday and climb back up to the 1.0200 former support level. That’s where I set my first profit target.

For my second profit target, I’m planning to aim for the 1.0400 level. I know it’s pretty ambitious, but that’d be just enough to close the gap we saw over the weekend. All gaps gotta close, right?

Once my first target is hit, I’ll be moving my stop to breakeven in order to protect my profits. Also, I’ll be keeping close tabs on the upcoming U.S. and Australian economic data to see if I should exit early or keep holding on.

Here are my AUD/USD swing trade details:

Long AUD/USD at 1.0000, initial stop loss at .9950, pt1 at 1.0200, pt2 at 1.0400. I risked 0.5% of my account on this trade.

Do you think this pair will go all the way up to my targets? I know some of my BFFs in the forums and on Twitter are with me on this one. I’d really love to hear from you,

Happy time

Day Trade Update: 2011-09-20 03:36
Alas! My AUD/USD curse is still on! Just when I thought the price was heading all the way down to my profit target, price zoomed up and I was unable to trim my losses in time. How was I supposed to know the exact moment when the Fed, ECB, BOJ, BOE, and the SNB would weaken the dollar and help the euro zone banks? My fingers just weren’t fast enough to exit in the middle of that sudden price jump. Ahh, so near yet so far…

AUD/USD DayTrade Update

I don’t know which is more frustrating, this losing day trade or Steve Carell being unable to bag the Outstanding Lead Actor Award in a Comedy Series during the 2011 Emmys. It’s his last season in The Office, for crying out loud!

As I always say, there’s no use crying over spilled milk. I guess this loss serves as a reminder that I should be more patient and not make any hasty decisions. With that, I’m still sticking to my original AUD/USD swing trade idea at parity.

If you’ve been dropping by my Comdoll Corners, you’d know that SimonTemplar, one of my Best Forex Friends, is also waiting on the very same trade opportunity. Hey, why don’t you come and join our discussion in the AUD/USD thread? I’d love to hear what you think!

Happy time

Day Trade Idea: 2011-09-15 06:36
For the scalpers and day traders out there who can’t wait for AUD/USD to reach parity, here’s a shorter-term setup I’m planning to take. Do you think I could catch pips with this AUD/USD short and ride it down to parity?

AUD/USD DayTrade Idea

AUD/USD seems to be moving sideways lately and support at 1.0200 has been as stubborn as my 4-year old nephew. There’s resistance at the day open price (1.0267), which is in line with a former support level, and now I’m thinking of shorting there. I’ll be aiming for the bottom of the range only, right at the 1.0200 handle or I’ll be closing my trade before the end of the day.

Thanks to my BFF @EnkhbatOne by the way, who pointed out that I should also watch for a possible double bottom break on my setup. Now I know that I have to be extra careful on this trade!

On the fundamental side, economic data from Australia has been a bit upbeat recently, with the Westpac consumer sentiment index printing a 8.1% increase and MI inflation expectations up a notch to 2.8% for August. However, the downtrend on AUD/USD remains strong since risk aversion is the dominant theme in the markets. Just yesterday, traders bought up the safe-havens when the U.S. showed weak retail sales and PPI figures, and we could see more of that when they release their CPI and manufacturing indices.

So who’s with me on this intraday trade idea? Do you spot any adjustments that I need to make? I know a bunch of you advised me to short this pair until it reaches parity so I should be seeing some hands raised!

Happy time

Swing Trade Idea: 2011-09-14 07:57
All right, it’s time to take another shot at trading the Aussie! After ending my losing AUD trades with a break even last time, will I finally score a win this time?

AUD/USD already went down by 225 pips for the week, so I figured it could reach parity especially if the euro zone debt crisis continues to make headlines. If it does, then there’s a good chance that the worst case scenario is already priced in and the high-yielding currencies will be supported by some bargain hunters.

AUD/USD Parity Trade Idea

If you remember, the last time AUD/USD touched parity was in August 9, just before the FOMC announced its decision to keep rates uber low until mid-2013. If only I had taken that support-at-parity trade, I would’ve gained at least 750 pips on a swing trade!

This time I’m looking to buy the Aussie at parity especially if stochastic moves above the oversold region. I’m planning to place my stop at .9920, which is near August 9’s low. If my trade gets lucky and the pair bounces off support, I’m planning to adjust my stop and add positions every 100 pips.

Of course, I have to keep a close eye on news reports too. Right now markets are still jittery on buying high-yielding currencies, but based on the news that the euro zone, U.S., and even the BRIC leaders are willing to help the euro region, I’m thinking that risk aversion might be priced in already and start to support the comdolls soon.

What do you think of this trade idea? Do you think AUD/USD will at least reach parity? Don’t hesitate to share those awesome ideas! You can keep in touch with me through any of these accounts:

@Happy_pip Twitter
Playing with Comdolls Facebook page
Happy Pip Comdoll Corners
MeetPips.com

Talk to ya soon!

Happy time

  • IanB2

    What I see is a flight to the US$ in difficult times – don’t lose too much on this one, playas!

  • Craig Jc

    If parity held in the past for AUDUSD I am sure history will repeat itself! Nice trade set up. As always I will take the same position :D

  • EnkhbatOne

    accept it as feedback and keep trading the pair until u master it :), good luck my BFF

    • happypip

      Thanks, BFF! I’m glad you already broke your unlucky streak in AUD/USD. Don’t worry, I’ll still trade this pair if I see a valid setup. I wouldn’t want opportunities to slip! Good luck in your trades this week :)

  • Marshall Clarke

    It’s Moontime!!! I’ll be watching the 1hr for:

    Clear Reversal Criteria  @ 1.02 – Double/Triple Bottom, Head & Shoulders
     
    or

    Basic Reversal Criteria @ 1.00 – Higher Highs, Higher Lows, Clean Retracements

  • Digitalgypsy5720

    That’s funny.  I was thinking the same thing.  I shorted at just above 1.0290, sl 1.0330 (100ema line) and profit at 1.0200

  • happypip

    Thanks for the encouragement, guys! Now I’m wondering when it would reach parity though. Looks like it’s encountering support at 1.0200. :|

    • Foricks

      …and the Aussie Dollar tends to rally after the summer swoon.  I’m bullish on this pair from an annual cycle perspective. 

  • Tayo Adewale

    for the weekend, i had moved my stop-loss to 1.0300 and my target has revised to 1.04800, no matter where market is heading to, i had locked in 100 pips in the trade i intended to risk only 50 pips

  • Craig Jc

    Great trade set up idea. My only worry is with the equity markets looking as if they are not concerned with the EURO debt crisis after the central banks collaboration this AM there could be a greater risk appetite and the AUD could shoot up in the near term to 1.03700 and beyond before stalling and heading towards parity. 

  • IanB2

    Isn’t the problem with this that parity isn’t some relatively extreme position – like Cable at $2.00 or $1.40 – throughout 2010 the Aussie traded between .800 and parity and throughout 2009 between 0.650 and 0.950? 

    If on the fundamentals there is a ‘flight to the dollar’ it is hard to see why the parity level would offer any support at all.   Therefore this would be a trade with a large downside risk and I’d want to get in and out quickly and keep a close eye on it!

    • happypip

      Yep, I get what you’re saying! I’d want to be out of this trade if it breaks below parity too!

  • Piers

    It’s on my watchlist for this very reason.

  • Tayo Adewale

    I am looking at 2 support zones one at 1.0200 and another at parity solidified by a drawn support trend line from November 2010. i now entered a long trade from 1.0200 risking 50 pips, targeting 1.0600 if i get burn, i will do the same at parity 

  • IanB2

    Sadly I think this trade is a dud, as I suggested before

  • Digitalgypsy5720

    hmmm…interesting idea. this might just work.  im in! ;-)

  • Clertor

    HI Happy,
    I think for that trade to happen it would need to take a few days, if not weeks.
    Why not just go with the trend right now, and short the Aussie at a new retrace of the current move? You can sell and go down to parity if you believe is going to get there for about 200 pips.
    I’m not saying it’s a bad trade, but just that it would take a lot. You need confirmation of a change of trend on smaller time frames first, then enter on a pullback…etc…
    Too many ifs.
    If it is a position trade you are looking at, that’s fine, but again, need confirmation of a change of trend before you get in, otherwise you might get burn.
    Just trying to help
    good luck!!!

    • happypip

      Thanks for sharing your thoughts @cdf6eca27a9e68603e26e89efbb7bf2a:disqus ! I do understand it could take a long while before it reaches parity, especially since it’s finding support around 1.0200 now. The thing is, I think a bounce from parity is a higher-probability trade than shorting it on a retracement. Let’s see how this goes!

    • Marshall Clarke

      I agree… I had an open short position and added another order to it at 1.0285 after the candle close. Both orders are still open I am waiting for a retracement signal to add ANOTHER short position.

      Meanwhile, as stated in my comment below, I’ll be monitoring price action for potential reversals.

      • happypip

        Roger that! The downtrend still looks steady but I’m scared to jump in because it could be overdone. I’ll be waiting in case it reverses at 1.0000 though. Good luck on your trade, my friend!