AUD/USD – Trade Closed

Trade Closed: 2008-02-05 15:24

Our trade has closed after a strong US Dollar corrective rally and reversion from risk, kicked off in the morning European trading session.

The pair has dropped back below the .9000 handle, taking us to our stop out point.

1st Half: +100 pips
2nd Half: +445 pips
Total: +545 pips/ +2.75% gain

I hope everyone did well. This corrective rally may be an opportunity to go long once again in Aussie, so we will keep an eye out for another buying opportunity. Stay tuned my friends

Stop Adjustment: 2008-02-04 14:00

The Aussie has done nothing but go up since the markets opened up yesterday, and now with the US session wrapping up soon, the pair is taking a breather after testing the .9100 handle.

We will lock in more profits and ride out this trade by moving our stop from .8895 to .9000. No set profit target.

The move higher is probably on speculation the RBA will raise interest rates by 25 bps to 7.00% this week. So, we may see a sell off on profit taking on the announcement, especially if the decision is inline or lower than consensus. This may prove to be a buying opportunity for longer term traders as I think the pair will continue higher as Australia’s economy continues to remain strong and consumer prices continue to rise. We will have to wait and see.

For those who are currently in the run, don’t forget that adding to winners can be a great technique to enhance profits and worth the risk. Stay tuned for updates!

Stop Adjustment: 2008-02-01 07:45

AUD/USD is testing the .9000 handle once again and with US Non-Farm Payrolls right around the corner, we will adjust our stop to lock in further profits.

Adjust stop on remaining position to .8895.

I moved our stop to .8895 instead of .8905 just in case we saw strong buying support at .8900 if the pair move back down that low.

For those who are a little more prudent, taking a bit of your position off at these levels (above .9000) would be wise. If the pair falls you can always renter back at probably a better price.

Stay tuned for more trade updates and please be very cautious when trading around today’s US Jobs data. Prices can move very fast resulting in whipsaws and slippage on trade executions. Remember that limit order execution doesn’t guarantee a price, it just means you get the next best available market price and during this report, prices can move very, very fast. Be careful and good luck!

Stop Adjustment: 2008-01-30 22:45

Another volatile day in the currency markets as we saw the FOMC cut overnight interest rates down to 3.00%. We saw the Aussie whipsaw up and down after the event and now it is currently trading just below .8900. We will make another stop adjustment IF the pair rallies further.

Adjust stop to .8905 if the pair reaches .9000

Weak US Dollar should continue to play out, especially since commodities and gold may continue to rally on Greenback weakness.

We still have US Jobs data to close out the week, so volatility may remain high. Stay tuned for further updates and adjustments. Good luck my friends!

Stop Adjustment: 2008-01-29 07:50

Everything just seems to be going the Aussie’s way with gold and commodity prices continuing to push higher as well as weak US Dollar sentiment on the most recent weak housing data. The pair is now currently treading just below .8900 and I think its time to lock in more profits once again.

Adjust stop from .8755 to .8805

I have a feeling .8900 may be the ceiling in the short term, so we will continue to watch closely especially at the .8850 price area. Stay tuned for more updates and adjustments!

Stop Adjustment: 2008-01-24 19:13

We saw further risk appetites growing today, along with surging gold, push up the Aussie above .8800. Weak US Existing Homes Sales were no help for the Greenback as they came in below expectations. Let’s make a few adjustments to lock in more profits.

Adjust stop on remaining position to .8755. We will continue to trail stop by 100 pips.

There’s still talk of the RBA raising rates in Australia, so there’s still plenty of sentiment to be bullish the Australian Dollar. We will continue to keep an eye on our position. Stay tuned!

Stop Adjustment: 2008-01-24 09:02

AUD/USD found support at .8700 during the morning European trading session with enough buyers to push it up to .8750 and beyond. We will adjust our stop to lock in more profits.

Adjust stop from break even to .8655. If the pair reaches .8800 we will adjust our stops to .8700

A quick trading technique lesson: Scaling into winners. For those in for the longer haul, .8750 – .8800 may be a good area to add on to your position in small increments. For example, if your total position size is 100k, you could possibly add another 10k with the same stop. Because you have already locked in profits, if your position is stopped out, the loss on the new 10k is minuscule in relation to the gains of the larger position. If the position does go your way, you are just enhancing your overall profit. Hope this helps!

Trade Adjustment: 2008-01-22 11:18

The Aussie fell all the way down to .8520 and found support at the start of the European trading session. Our position was entered at .8555 on this fall and luckily, buyers jumped in and pushed the pair to .8600.

Then we saw the surprise inter meeting rate cut from the FOMC to bring interest rates down to 3.5% in the US. Of course, AUD/USD popped even higher as traders sold Greenbacks and our first profit target was hit at .8655.

Adjust stop on remaining position to breakeven (.8555) to create a risk free trade. If the pair reaches .8755, we will adjust stop once again to .8655

We will continue to hold onto this position, collect some interest, and adjust stops if the trade continues to go our way. Stay tuned my friends!

Trade Idea: 2008-01-21 19:44

comdollsff

Hello Everyone! What a sell off we have seen in the high-yielding currencies pairs and carry trades. I think it may be a bit overdone at the moment and we may see support at .8500 – .8550.

On the chart, I have drawn a price level where the pair found support and rallied back on 12/17/2007. Also, stochastics are indicating the pair may be oversold as it the indicator is currently reading below 20 and the pair is currently trading around the outer Bollinger bands. So, technically, the Aussie may be due for a reversal, possibly back to .8800.

Fundamentally, we’ve seen selloffs in higher risk assets, including carry trades, on risk aversion. Again, I feel this sentiment may be overdone and I think buyers will get ready to jump back into the Aussie. There is speculation that the RBA may have to hike rates as Australia’s yearly inflation reads at 3.3% – outside of the targeted comfort zone of 2% – 3%. For the US, traders are speculating a 50 bps cut from the Fed, and there’s even talk of the Fed taking overnight interest rates down to 3% by the summer. So, with a potential growing interest rate differential between the US and Australia in the works, the AUD/USD is looking a bit more appealing.

So, I am looking to buy AUD/USD at the support level drawn on the chart.

Long AUD/USD at .8555, stop at .8455, pt1 at .8655, pt2 at .9000

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

Stay tuned for adjustments and updates…good luck my friends!

  • ndhoanggia

    HappyPip, what are the stochastics settings you’re using? Also, the red, organge, and blue lines are your EMA’s? What are the settings on those? Lastly, do you think NZD/USD is a great buy as well since people are saying that NZ’s interest rate is expected to raise while the US’ economy is under respirator support? Thank you!

  • ndhoanggia

    HappyPip, what are the stochastics settings you’re using? Also, the red, organge, and blue lines are your EMA’s? What are the settings on those? Lastly, do you think NZD/USD is a great buy as well since people are saying that NZ’s interest rate is expected to raise while the US’ economy is under respirator support? Thank you!

  • happypip

    I used 14, 3, 3 on my stoch settings. The red and orange lines are the Bollinger bands with 1 and 2 standard deviation settings. The blue lines are my 240 EMA’s set on the high, low, and close. I like NZD/USD as a longer term play on interest rate differential and a general commodity play. It’s probably late to catch today’s move, but again, longer term it’s pretty attractive to carry trade players and US Dollar bears. Thanks for checking out my blog!

  • cwavefx

    Nice call HappyPips! I didn’t take this as I was still expecting more tankage, but who knew Firemen Ben and his men would come to the rescue w/ a emergency rate cut? First time I’ve ever seen this, too bad I sat out on it :P

  • happypip

    I used 14, 3, 3 on my stoch settings. The red and orange lines are the Bollinger bands with 1 and 2 standard deviation settings. The blue lines are my 240 EMA’s set on the high, low, and close. I like NZD/USD as a longer term play on interest rate differential and a general commodity play. It’s probably late to catch today’s move, but again, longer term it’s pretty attractive to carry trade players and US Dollar bears. Thanks for checking out my blog!

  • cwavefx

    Nice call HappyPips! I didn’t take this as I was still expecting more tankage, but who knew Firemen Ben and his men would come to the rescue w/ a emergency rate cut? First time I’ve ever seen this, too bad I sat out on it :P

  • peej

    Thanks for this trade Happypip. Doesn’t look like PT2 is going to happen anytime soon but made a nice 100 pips on PT1. One more question on your Bollinger bands. What are the period and shift settings you use with those?

  • PipsiCola

    I’ve noticed that stochastics (14,3,3) is showing a hidden bearish divergence versus price on the latest graphs. Might be a good time to half your stop to lock in a few more pips, or close out completely to lock in what you’ve got.

  • peej

    Thanks for this trade Happypip. Doesn’t look like PT2 is going to happen anytime soon but made a nice 100 pips on PT1. One more question on your Bollinger bands. What are the period and shift settings you use with those?

  • PipsiCola

    I’ve noticed that stochastics (14,3,3) is showing a hidden bearish divergence versus price on the latest graphs. Might be a good time to half your stop to lock in a few more pips, or close out completely to lock in what you’ve got.

  • happypip

    Hello Peej! Bollinger Banks are set to 240, and 1 and 2 standard deviation. No shift settings.

    Hey PipsiCola! There’s momentum to the upside now, and a lot of traders on the sidelines itching to do something with their cash. I think we will hit .8800 before we see any meaningful resistance… Of, course if we hit .8750 i’m definitely going to move my stop up. Stay tuned!

  • happypip

    Hello Peej! Bollinger Banks are set to 240, and 1 and 2 standard deviation. No shift settings.

    Hey PipsiCola! There’s momentum to the upside now, and a lot of traders on the sidelines itching to do something with their cash. I think we will hit .8800 before we see any meaningful resistance… Of, course if we hit .8750 i’m definitely going to move my stop up. Stay tuned!

  • PipsiCola

    Good call, HappyPip. I guess divergences aren’t everything, are they? :)

  • happypip

    Hey PipsiCola… I think divergences do work (ForexNinja uses the strategy alot), but their timing is usually way too early in my experience. Again, I think .8800 may stall the rally. we’ll just have to wait and see :)

  • PipsiCola

    Good call, HappyPip. I guess divergences aren’t everything, are they? :)

  • happypip

    Hey PipsiCola… I think divergences do work (ForexNinja uses the strategy alot), but their timing is usually way too early in my experience. Again, I think .8800 may stall the rally. we’ll just have to wait and see :)

  • sun212

    Hi sweetie,
    Am very happy you are one of babypips.com member….Sweetie I want you to tell me reputable Forex Broker you trade with or you give me the one I can open Live account with, Regulated with CFTC, NFA and FSA. Most important bro that accept E-Currencise. My emaiul Address is sunbest2010@yahoo.com.
    I wait to hear from you Big Bro.
    Thanks

  • sun212

    Hi sweetie,
    Am very happy you are one of babypips.com member….Sweetie I want you to tell me reputable Forex Broker you trade with or you give me the one I can open Live account with, Regulated with CFTC, NFA and FSA. Most important bro that accept E-Currencise. My emaiul Address is sunbest2010@yahoo.com.
    I wait to hear from you Big Bro.
    Thanks

  • PipsiCola

    Hope everyone put some trailing stops on this trade… or has been watching it like a hawk today. Feds just dropped the interest rate on the Greenback another %0.50. Aussie shot up a hundred pips in under an hour, and looks to be enjoying some further mommentum… for the moment anyways.

  • PipsiCola

    Hope everyone put some trailing stops on this trade… or has been watching it like a hawk today. Feds just dropped the interest rate on the Greenback another %0.50. Aussie shot up a hundred pips in under an hour, and looks to be enjoying some further mommentum… for the moment anyways.

  • NEWMAN07

    Just wann say well don, i have been following your commentries.keep it up!!!!!!!!!!

  • Batman3298

    Hello Happy Pip,

    This is an excellent trade you have. I watched your entry and jumped in and out making some pips. How many lots did you use on this trade?

  • NEWMAN07

    Just wann say well don, i have been following your commentries.keep it up!!!!!!!!!!

  • Batman3298

    Hello Happy Pip,

    This is an excellent trade you have. I watched your entry and jumped in and out making some pips. How many lots did you use on this trade?