Trade Closed: 2009-11-23 11:10
Good morning! Well, it looks like risk aversion moves didn’t follow through as the Dollar sold off and risk assets rally at the open of trading today. Gold is hitting new highs and AUDUSD has pushed up higher, stopping out my remaining position at breakeven.
Remaining position closed at .9230
1st Half: +120 pips
2nd Half: +00 pips
Total: +0.50% gain
So, the rangebound markets continue and look to play out for the rest of the holiday week in the US. If that’s the case, it looks like AUDUSD is retesting that previously broken neckline and stochastics are indicating overbought conditions. Looks like a good setup? I think it is, but I think I will sit back for now an watch how the markets behave. Stay tuned!
Trade Update: 2009-11-20 15:38
Good afternoon! For those who have been keeping up with AUDUSD, you know the pair finally broke the neckline and triggered my short orders at .9230. A round of risk aversion has hit the financial markets yesterday and today, giving the greenback a boost against the Aussie, and hitting my first profit target at .9110.
Half of my position was closed there, and I have adjusted my stop the remaining position to break even to create a risk free trade.
I have decided to keep my remaining position open over the weekend as I feel we are seeing a new direction in the market this week that may continue into the next. I know this is breaking my rules, but I feel that there won’t be too many people taking on risk, especially after a monster run over the past 6 months and heading into the holidays/year end. Of course, if I’m wrong, that’s what stops are for… hehe!
Great trade so far and let’s see where the market takes us next week…until then, have a fabulous weekend!
Trade Idea: 2009-11-18 13:08
Good afternoon forex friends! I am watching a classic chart pattern form on the AUDUSD, which may prove to be a nice short term opportunity. Is it time for a retracement in the current AUDUSD rally?
Today’s setup is pretty simple as I have the four hour chart up on AUDUSD, and I have pointed out the head and shoulders pattern forming. This is a potentially bearish signal as the market fails to make a new high and sellers remain in control If we do see further movement lower, I look to take a short position below the neckline drawn on the chart.
The rally in this pair looks a bit tired after a +4% rally from the .8900 swing low at the beginning of the month. A quick look at the stochastics on the daily chart indicates this may be the case as it reads over 80.
Fundamentally, it seems like it’s all signs point to further selling of the greenback as we recently saw indications that the FOMC is forecasted to hold rates low well into 2010, the US deficit continues to grow, and Bernanke comments that he does not see equity and commodity assets overvalued. Gold has made new all time highs touching 1150, but like they say, “markets can’t shoot up forever!”… or something to that effect. I feel buyers are running out of steam and it may be time for a pull back.
So, I look to take a counter-trend, short-term trade short position based on technicals. My stop will be above the recent swing high and the daily average true range of AUDUSD – 120 pips. I will target the previous swing low around .8900, but I will be sure to take profits quick as any kind of pullback will encourage Aussie bulls to further build up their long AUDUSD positions. Here’s what I am going to do:
Short AUDUSD at .9230, stop at .9350, tp1 at .9110, pt2 at .8910
Remember to never risk more than 1% of any account on any single trade. Adjust position sizes accordingly.
Thanks for checking out my blog and stay tuned for updates and adjustments!