Trade Closed: 2008-04-23 10:22
Our hopes for a “buy the rumor, sell the news” didn’t pan out for the AUD/USD as the pair boosted higher, rather than selling off on profit taking just after the release of Australian CPI yesterday. .9500 was unable to hold off buyers as well and our short position was stopped out at .9520 for a 1% hit.
Total: -70 pips/ -1.0% loss
The pair is actually back to our entry point now, trading near .9460, on US Dollar strength this morning and will probably remain steady for the rest of the Euro/US trading session overlap.
Stay tuned for a new trade idea!
Trade Update: 2008-04-22 13:20
Hello everyone! Our short AUD/USD position was entered this morning as the pair treaded higher after touching .9400 during the afternoon Asian trading session. The rally continued higher, but met resistance at .9475 before turning lower and currently trading around .9460.
I feel like this rally may be running out of steam in the short term, but we have Australian CPI set for release in the upcoming trading session. Again, expectations are for an increase in inflation, but that may be price into the pair already. We may end up seeing a “buy the rumor, sell the news” type scenario.
We will continue to watch this pair, and be ready to adjust our position quickly if need be.
Good luck and stay tuned!
Trade Idea: 2008-04-21 19:01
Greetings! As I pointed out in my last post, AUD/USD is moving in a channel which may provide an opportunity for a short play.
On the chart, we can see the pair hitting the upper trendline, right around previous highs hit back in February and March, just under .9500. Stochastics are hitting overbought levels once again on the 4 hour chart. So, we may see sellers eyeing this level once again.
Fundamentally, the Aussie has been rocking and rolling as inflation keeps the RBA hawkish, but are near term expectations fully priced in? Will the RBA hold interest rates instead of raising them in May? Maybe so, and if the markets begin price in a hold on interest rate cutting in the US next week, then we may see a turn lower in the pair.
Because this is a counter trend play, we will keep our profit targets tight, and our stops even tighter. Here we go!
Short AUD/USD .9450, stop at .9520, pt1 at .9380, pt2 at .9300
Remember to never risk more than 1% of your account in any single trade. Please adjust position sizes accordingly.
Good luck my friends!