AUDUSD – Trade Closed

Trade Idea: 2009-06-03 14:25

Good afternoon! The US Dollar rallied huge today as sentiment on economic recovery may be weaker than previously hoped for bringing in a new, and strong round of risk aversion!

My long entry orders were triggered at .8140, and while there was a tiny bounce higher after I was triggered, weak ADP employment data gave the markets enough reason to start selling and taking profits. My long position was quickly stopped out for a small loss.

Total: -50 pips/ -1.0% loss

Geez! So, it looks like the trend wasn’t our friend, but thank goodness for stop loss orders! This definitely a short-term sentiment change as AUDUSD moved about 300 pips to the downside. The US employment data may bring about more risk aversion, so be aware of its release on Friday at 1230 GMT. Until next time, stay tuned!

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Trade Idea: 2009-06-02 18:40

comdollsff

Good evening Forex friends! AUDUSD has been on a tear, mostly on US Dollar weakness over the past several weeks. Is it still a good time to buy on any retracements?

Technically, this pair has been in an uptrend, and because “the trend is our friend,” it makes sense to buy into the rally. We may see a pullback, or correction, in the short-term as the stochastic indicator shows that the pair may be overbought across different time frames. I used the Fibonacci tool to pinpoint a possible re-entry point, and I like the 50% Fibonacci retracement level because it lines up with previous minor resistance-turned-support.

Fundamentally, Australian data has surprised with better than expected data, and the Reserve Bank of Australia recently kept interest rates at 3.0%. This continues to entice investors to scoop up Australian Dollars versus the US Dollar because of its interest rate advantage. This may continue in the medium to long term, but in the short-term we do have Australian quarterly GDP later today. If it disappoints, we may see the pullback I may need to jump into the rally higher. ADP and ISM services data will be out in the US a little bit later, so it should make for an interesting day of trading!

So, I’d like to take a short-term trade on AUDUSD if there is a pullback to the 50% Fibonacci levels. Here is what I am going to do:

Long AUDUSD at .8140, stop at .8090, pt1 at .8190, pt2 at .8240

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

Be safe and stay tuned!