Trade Closed: 2008-07-30 08:34
It looks like the major trendline on our chart has broken as USD momentum continues today on the back of declining commodity prices and a positive ADP report out of the US.
Our trade was stopped right after the release of the ADP Employment beat the expectations of -48K jobs with a surprise read of +9k jobs gain.
Total: – 75 pips/ -1.0% loss
It looks like the USD rally against the Aussie may be for real with this trendline break, so look for short opportunities in the pair for the short term. Good luck!
Trade Update: 2008-07-29 15:12
We’ve finally hit our entry orders as the Greenback rallies on declining oil prices and a positive US Consumer Confidence report. Will the rising trendline hold?
Much has been priced into AUD/USD, including concerns for further global credit tightening, falling commodity prices, and the potential for further mortgage related losses. Further downside may be limited for moment, and if the longer trend holds, this may provide the opportunity for traders to jump in on the attractive interest rate differential between the two currencies.
I look to hold for now, but stay tuned for quick adjustment including a position closure if USD bullishness continues and the pair breaks the trend. Good luck!
Trade Idea: 2008-07-23 20:08
Recent strength in the Greenback has pulled AUD/USD down to an area of potential support, giving a nice opportunity to catch the trend and a positive interest rate differential. Are buyers ready to jump back into AUD/USD?
We have a very simple chart today, as we see an opportunity to catch the bottom of the rising channel.
Recent comments from Plosser, weakening oil, and the US Government saving Fannie and Freddie has boosted the Greenback for the past couple of the days. Also, interest in gold as an inflation hedge wanes as oil drops down below $125 a barrel.
Will US Dollar continue, or will market players now focus on recent reports of how Australian CPI and growth remain strong. The RBA is also likely to remain hawkish on interest rates until CPI drops, thus supporting sentiment for a strong Australian Dollar.
My play is simple today as I look to go long near the bottom of the channel just above .9500.
Long AUD/USD at .9520, stop at .9445, pt1 at .9595, pt2 at .9670
Remember to never risk more than 1% of your account on any single trade. Adjust position sizes accordingly.