Trade Closed: 2007-12-26 08:36
Our reverse trade was stopped out as the Aussie found plenty of support and buyers at the .8600 handle. It was almost expected, as we are in the holiday season where trading volume is light and follow through on any new trends is less likely to happen.
So in total:
First trade (full position): -65 pips/ -1%
Second trade (half position): -100 pips/ -0.5%
This will be the last trade for the year as volatility is expected to be low for the rest of the month. We hope everyone has had a wonderful holiday season and we look forward to seeing you in 2008!!!
Stop and Reverse: 2007-12-17 12:16
Our long trade was stopped out as momentum to the downside continued. With the pair breaking the range, will will go short on the pair on the potential of a continued move lower.
Short half position AUD/USD at market (.8565), stop at .8665, pt at .8335
The pair is approaching the 200 SMA on the daily chart, so look for support around .8500. Recent Dollar strength on inflation data may provide enough momentum will break that support area. Stay tuned for updates and stop/profit adjustments! Good luck my friends!
Trade Update: 2007-12-14 16:23
Our long trade position has been entered at the bottom of the range on today’s Dollar rally.
Unfortunately for now, the move was so strong it took us near our stop out point and the AUD/USD closed the week out around 0.8616. It looks like the pair is ready to break the ranging pattern, so if we get stopped out prepare to reverse our position.
If stopped out…
Short AUD/USD at .8600, stop at .8685, pt1 at .8540, pt2 at .8334
Good luck and have a great weekend!
Trade Idea: 2007-12-10 15:44
Hello! We have a nice range play forming in AUD/USD that we may be able to take advantage of in the next few days.
The pair has been in a downtrend since hitting all time highs around .9300 – .9400, but range bound between .8650 and .8920 in recent weeks. Technically, we see the top of the range around .8920, so we may see resistance there, and support around .8665 which happens to be just below the 38% Fib retracement level on the weekly chart.
Fundamentally, the pair has been rising as the markets get ready for a possible cut by the FOMC by at least 25 basis points setting up a “buy the rumor, sell the news” scenario. If the pair is around .8900 when the announcement is made, we may just see that scenario play out.
A couple of other things to consider. On the short side is the price of Gold. Right now below the highs, we may the Aussie follow the metal if it continues to fall. For the longs, if the FOMC does cut which makes the Aussie favorable with its higher, 6.75% overnight interest rate.
So, for now we have a range play setup, but if we see a breakout, be ready to do a stop and reverse play to catch the direction of a new trend.
Short AUD/USD at .8920, stop at .8985, pt1 at .8855, pt2 at .8665
Long AUD/USD at .8665, stop at .8600, pt1 at .8730, pt2 at .8900
Remember to never risk more than 1% of account on any single trade. Adjust position sizes accordingly.
Good luck my friends!