AUD/USD – Trade Closed

Trade Closed: 2008-08-27 12:00

The Greenback could not maintain it’s strength during the Asian and European trading sessions and pushed the AUD/USD back out to my entry price at .8600. My remaining position was stopped out at breakeven.

1st Half: +100 pips
2nd Half: +00 pips
Total: +0.50% gain

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Trade Update: 2008-08-26 12:00

There was enough volatility during the Asia trading session to bring AUD/USD back up to .8600 and trigger my orders short. The pair fell throughout the Euro session as the Greenback gained strength on Euro weakness after significant Eurozone data. This brought the pair all the way down to my first profit target at .8500, closing out a portion on my trade.

Half position closed at .8500 to lock in +100 pips. Adjusted stop on remaining position to breakeven to create a risk free trade.

The pair is back up on US Dollar weakness as oil prices rise over concerns of Hurricane Gustav. This rally maybe temporary and it looks like we may see another test of .8500. I will continue to hold onto my position for now. Stay tuned and good luck!

Trade Idea: 2008-08-25 19:46

comdollsff

Greetings! The Aussie has taken a beating for the past month, and it looks like this week may not be any exception.

AUD/USD has fallen on the sentiment that as the Australian economy begins to slow its growth, we may see rate cuts from the RBA. Also as inflation slows and commodity prices fall, the central bank has less of a reason to keep rates up at its current level at 7.25%. Credit concerns are rising once again globally, making higher yielding assets less desirable in the short term.

In the US, data has surprised to the positive side lately, including today’s US existing home sales data. Will we see another uptick in US data with consumer confidence and new home sales later in the US session? If we do see a surprise to the upside, it could fuel a further rally in the US Dollar. If not, we could see a rally in AUD/USD, which I wouldn’t mind seeing as it would give me a better price to jump in the downtrend.

As I write this, AUD/USD has already popped below the previous low, currently trading below .8600. If the pair finds its way back to .8600, I look to short from there.

Short AUD/USD at .8600, stop at .8700, pt1 at .8500, pt2 at .8400

Remember to never risk more than 1% of the trading account on any single trade. Adjust position sizes accordingly.

Good luck my friends!

  • jaguar1175

    i know that oil prices can drive the value of the Canadian dollar, but what are the commodities that drive the Aussie and NZ dollars?

  • Pipcrawler

    Hey jaguar, check out our lessons on Comdolls in the School of Pipsology: http://www.babypips.com/school/commodity_currencies.html

  • jaguar1175

    i know that oil prices can drive the value of the Canadian dollar, but what are the commodities that drive the Aussie and NZ dollars?

  • Pipcrawler

    Hey jaguar, check out our lessons on Comdolls in the School of Pipsology: link to babypips.com

  • jaguar1175

    Okey Dokey-but still no specifics on what commodities drive NZ dollar. It’s probably not vital info, just an interesting area to explore.

  • jaguar1175

    Okey Dokey-but still no specifics on what commodities drive NZ dollar. It’s probably not vital info, just an interesting area to explore.

  • happypip

    In the current market environment, no commodity has a direct affect on any currency, with the exception of oil and the US Dollar. It seems that when oil prices spike, the Greenback moves and vice versa. The relationship between other commodities and currencies are strong correlations – not direct effects. Raw materials and agriculture make up a large portion of New Zealand’s exports. Price shifts in those commodities can affect the NZ economy and thus may have an effect on the Kiwi, thus creating similarities in price movement. I hope this helps. :)

  • happypip

    In the current market environment, no commodity has a direct affect on any currency, with the exception of oil and the US Dollar. It seems that when oil prices spike, the Greenback moves and vice versa. The relationship between other commodities and currencies are strong correlations – not direct effects. Raw materials and agriculture make up a large portion of New Zealand’s exports. Price shifts in those commodities can affect the NZ economy and thus may have an effect on the Kiwi, thus creating similarities in price movement. I hope this helps. :)

  • badbeets

    Thanks Happypips! That last short trade at 86. worked out well for me today. Missed some profit because I overslept but all is good. Just went short the AUD @ .8549 and is falling out of the gate =)

  • badbeets

    Ahhh, gotta be quick in this market! Kept a hand full of pipness on that trade, but re-shorted her higher and got blown out of a 20 pip stop. Ouch! Well, at least the price is higher now for a better entry but I am sitting on my hands now thinkin……

  • badbeets

    Thanks Happypips! That last short trade at 86. worked out well for me today. Missed some profit because I overslept but all is good. Just went short the AUD @ .8549 and is falling out of the gate =)

  • badbeets

    Ahhh, gotta be quick in this market! Kept a hand full of pipness on that trade, but re-shorted her higher and got blown out of a 20 pip stop. Ouch! Well, at least the price is higher now for a better entry but I am sitting on my hands now thinkin……

  • icei

    Hi happy pips … the pair has rallied back to 8610 during asia time… just wandering if u are still in a trade or trade has been closed?

  • icei

    Hi happy pips … the pair has rallied back to 8610 during asia time… just wandering if u are still in a trade or trade has been closed?

  • happypip

    My remaining position has been closed Icei.

  • happypip

    My remaining position has been closed Icei.