AUD/USD: Will History Repeat Itself? – Orders Canceled

Trade Update 2011-12-16 01:53:01
Argh! I can’t believe I missed out on another huge AUD/USD move. The pair retraced only until the 1.0046 mark before sliding all the way down to the .9900 major psychological support. Had I not been too conservative with my entries, I probably would’ve been enjoying almost 150 pips in profits by now. Congratulations to those who were able to catch the move though!

AUD/USD No Retracement

Right now, it looks like the pair is retracing from the sharp drop and could make another test of parity. Some say that the recent bounce was a result of an improvement in risk appetite, but I wouldn’t be so sure. From the looks of it, traders aren’t so pessimistic lately considering we’re not seeing the usual amount of bad news from the euro zone these past few days. The downtrend still seems intact though and the bounce could be a mere retracement and not a reversal yet.

However, instead of adjusting my entries, I just decided to close my open orders for now since I don’t want to keep any trades open over the weekend. Besides, I have plenty of Christmas get-togethers planned for the next few days and I might not have time to monitor my trade.

Who was able to catch this AUD/USD drop? And who is planning to jump in? I may not be in a short trade myself but I’d like to know how you’re playing this pair! You know where to reach me!

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Chips, dips, and I hope you grabbed some pips!

Happy time

Trade Idea: 2011-12-14 06:50:31

With AUD/USD flirting with parity again, I decided to observe the pair’s price action the last time it was around the level. And what do you know, a pattern emerged!

As you can see on the chart below, AUD/USD last dropped to parity almost exactly a month ago. At that time, the pair encountered support near parity, pulled back to 1.0100, and then plunged by as much as 400 pips!

AUD/USD 400-pip Drop

This time around I’m looking for another pullback to 1.0100, as AUD/USD is currently showing a bullish divergence on the 1-hour chart. Not only that, the level is also lining up nicely with the 61.8% Fib! Still, there’s always a chance that history doesn’t EXACTLY repeat itself, so I’m planning on scaling in my positions.

I placed my first order at 1.0075, the 50% Fib, while my second order is at the 1.0100 level that I’m eyeing. If I get triggered and the pair goes down, my first profit target would be the parity level. In this case I will keep my second position open until I determine another good profit target.

AUD/USD Short Trade Idea

Fundamentally, I’m counting on the recent increase in risk aversion to provide momentum for AUD/USD downward move. If you remember, Australia printed a weak trade balance report as well as a disappointing quarterly housing starts data earlier this week.

Meanwhile, concerns on the euro zone debt crisis and the Fed‘s lack of QE3 plans are weighing on the high-yielding currencies, which could be good for my trade idea if it gets triggered.

I don’t see any other major U.S. or Australian reports for the rest of the week, so I’ll just be extra watchful of any events that might influence risk appetite.

So, what do you think of my trade idea? Will AUD/USD reach 1.0100, or should I set my eyes on lower levels? Is the market still bearish on the Aussie? As always, your tips will be much appreciated!

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Chips, dips, and a lot of AUD/USD pips!

Happy time

  • ascms

    Happy Pips,
    Right now there is a descending wedge on the 1 hr $/cad and it has hit the bottom of a fibo ( if you believe you can predict tops and bottoms). Have a great weekend

  • Mike Wagner

    Think the 9950 was it for now. Better ROI long from here IMO.

    • happypip

      Cool, a counter trade! What do you think is a good profit target for a long position? :)

  • danbld

    Targeting the gap that must fill up. Good luck

  • danbld

    Nice, Happy. I already entered the trade at 1.0033.

    • happypip

      Yay, good for you! Are you thinking of locking in profits or adding to your position? :)

      • danbld

        No, Happy, I will stay on this trade until the gap will be fill up

      • danbld

        u saw gold chart?

        • happypip

          Yep. It’s even crazier than AUD$! Do you have a position open on gold? :)

          • danbld

            No, i never trade gold. I just use the gold chart in my trade strategy (see AUD, NZD)

  • Greg

    Hi Happy, I think Santa missed us! I had my order at 1.0050, frustrating, bearish candle went 6 pips short of entry. I am kicking myself now…..missed it!

    • happypip

      Aww, don’t feel too bad! We still have a few days left before the holidays! I’m thinking of entering at a retracement, but I’m not sure where exactly to enter. :)

      • Greg

        Looking at .98850/80, looks like there is some strong resistance at that level. What about you?