Trade Closed: 2009-03-12 19:50
Boo Hoo! My trade was stopped out yesterday as minor resistance failed to hold. Risk tolerance grew as confidence return to traders on positive banking news. AUD/USD rose, along with other “higher-yielding” currencies, and hit my stop at .6625.
Total: -75 pips/ -1.0% loss
So, it seems like I can’t catch a break on my risk aversion bias as mixed data continues to keep AUD/USD in a range. This trade was a bit frustrating as I had a chance to take a small profit twice, but I decided to hold out for the bigger win. In this environment of uncertainty, it may be more prudent to take small profits.
The pair is now hitting the next resistance level at .6550. I am probably going to short here as well, especially as stochastics show divergence on the four hour chart. Stay tuned!
Trade Update: 2009-03-10 23:25
Greetings Everyone! Just a quick update as AUD/USD rallied up to my short level at .6450 and has gyrated in between .6400 and .6500 since then. We just got reports that home loans in Australia are worse than expected and the AUD/USD took a quick drop lower to current levels around .6420.
So, I’m currently still in my trade with a little bit of unrealized profit. After the Home Loans data, the next big event to watch for the pair is Australian jobs data. Will we get more disappoint data for the Aussie? We’ll just have to wait and see. Stay tuned and good trading to all!
Trade Idea: 2009-03-09 21:29
Good morning Forex Friends! AUD/USD has been in a range bound pattern since mid-February and with so much uncertainty still prevalent, this behavior may continue forward. Let’s see if I can get some quick pips by selling any possible rallies.
A quick look at the four hour chart, and it is easy to see the sideways movement of the market. It looks like support at .6300 has held once again, but I like to pair up my technical trades with some fundamental/sentiment basis.
Currently, everyone is flocking to the US Dollar as a “safe haven” play. It seems there is no where to hide as economies across the globe continue to slide, possibly into worse situations than in the US. It seems even gold has found its short term ceiling at US$1000. US Dollar will continue to be supported by this sentiment of “risk aversion,” and may even get a boost against the Aussie this week as we are set to see employment data from Australia. Speculation is that we will see job losses and a rise in unemployment. There is plenty of US data to sift through as well, potentially bringing more choppiness as both economies look to post bad data and no certainty of a turn around in sight.
Back to the chart, I like a short-term play at the minor resistance levels and target the bottom of the range around .6300. I think if the pair makes it up to .6450 it may hold at least for a few days. Here’s what I’m going to do:
Short AUD/USD at .6450, stop at .6525, pt1 at .6375, pt2 at .6300
Remember to never risk more than 1% of a trading account on any single trade. Adjust position sizes accordingly.
Prepare for the choppiness to continue and stay tuned for updates!