Trade Closed: 2009-10-28 00:50
Good morning! Looks like my trade worked out good, but not great as Australian inflation data briefly spiked AUDUSD higher and closed out my remaining position, preventing me from hitting both profit targets.
My short trade was triggered at .9200 shortly after my post as AUDUSD treaded higher and topped out around .9215. The pair fell lower throughout the European trading session where my first profit target was hit and I closed out half of my position to lock in profits. I adjusted my stop to break even on my remaining position, where the trade was closed out in today’s morning Asia session. Australia reported slightly higher than expected CPI readings and AUDUSD briefly traded above .9200 before dropping back down and eventually hit my second profit target.
1st Half: +50 pips
2nd Half: +00 pips
Total: +0.50% gain
Even after strong CPI data, sellers are out in full effect and taking any opportunity to short AUDUSD any chance they get. We may not see any real support until .9000 – a psychologically significant price level. Still plenty of more data to go this week, so stay tuned and be ready because we never know where the data will take us!
Trade Idea: 2009-10-27 01:20
Good morning Forex friends! It looks like sellers may be in control of AUDUSD in the short term as risk sentiment shifts towards aversion. The pair is retracing higher at the moment, so is this another opportunity to ride the pair lower?
First the technicals. I have a one hour chart up on AUDUSD, and we can see a few things. Lower highs marked by the downtrending line indicate short term control by sellers, which was emphasized with a break of support around .9190 – .9200. The pair has now retraced back up to the broken support. Support turned resistance? We can never know until after the fact, but it looks like the short term trend is down which makes this an area very attractive.
Risk sentiment many be coming back into the hearts and minds of traders as US bank losses may bring a hinderance to the global economic recovery. There are also concerns that of whether or not the global economy will can survive if government stimulus is pulled too soon. It looks like traders have decided to transfer some assets back into safe haven plays like the Greenback.
How long will this risk sentiment last? Hard to say, especially with plenty of data on the Forex calendar out this week to potentially turn markets around on a dime. Today, sentiment may be influenced by housing data from S&P/Case-Shiller and consumer confidence data from the US. Both are expected to post better reads, so AUDUSD may rally just a bit further here and take me to my preferred short level where support was broken. We’ll see. The most notable event of the week is the third quarter US GDP advanced reading. If I am in the trade I will probably exit before that event, or close open orders, depending on price action from here.
I think the psychologically significant round number of .9200 may bring in sellers, especially as it lines up with broken support and the 50% Fibonacci retracement area. My stop will be just above the falling trendline drawn on the chart and I will target previous support around this week’s and last weeks low. Here’s what I am going to do:
Short AUDUSD at .9200, stop at .9250, pt1 at .9150, pt2 at .9100
Remember to never risk more than 1% of a trading account on any single trade. Adjust position sizes accordingly.
Thanks for checking out my blog and stay tuned!