Comdoll Weekly Replay (August 15-19, 2011): 15:1 Return on AUD/USD

Aaaand AUD/USD takes the cake again! All the commodity currencies made pretty strong moves last week, but there can only be one winner of the Best Setup of the Week. Let’s give happy snaps to those who caught this 15:1 trade on AUD/USD!

Best Setup for the Week

Just when I was about to crown my long USD/CAD trade as the “Best Setup for the Week”, I took a quick glance at all the comdoll charts and noticed that AUD/USD provided an even better risk aversion play. But hey, my win with USD/CAD ain’t too shabby so better stay tuned for my trade update coming soon!

Anyway, I realized that AUD/USD’s move was even stronger and bigger as it made a 250-pip drop on Wednesday. Talk about a midweek reversal, huh?

AUD/USD 250-pip drop

That was the time when Morgan Stanley announced that the U.S. and euro zone are both dangerously close to a recession, so you can imagine how much traders panicked then. That was also the time when a huge bearish divergence materialized on AUD/USD’s 1-hour chart, just when the pair topped at the 1.0600 handle.

Had I shorted there and used a 50-pip trailing stop all the way down to 1.0350, I would’ve made a 5:1 trade. Even better, if I added to my position every 50 pips, I would’ve upped my reward to risk ratio to 15:1. Now that would’ve been cuh-razy!

Were you guys able to catch this trade? If so… Why didn’t you tell me?!?

I’m kidding, haha. Well, sort of. If you wanna help this young lady trader catch more pips in the comdoll arena, you know where to find me:
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See you around!

Happy time

What Moved the Comdolls Last Week?

The comdolls started last week with a bang as traders flocked to high-yielding currencies like the Aussie and the Loonie. Of course, it definitely helped the comdolls that new motor vehicle sales reports from both Australia and Canada registered dramatic improvements. Australia’s report showed an 8.6% increase in July from its 1.9% growth in June, while Canada’s data also improved from a 6.1% decline in May to a 10.8% rise in June. Nice!

Around the middle of the week the comdolls showed mixed results against the U.S. dollar while investors tried to get a read on risk appetite in markets. Still, all the waiting didn’t stop commodity-producing countries from releasing economic reports. We saw the dovish RBA meeting minutes and steady wage leading index from Australia; weak leading index, foreign securities purchase and wholesale and manufacturing sales from Canada, and a slight improvement in New Zealand’s credit card spending in July.

Gold high

By the end of the day (or the week in this case), the comdolls were still at the mercy of risk appetite. Comdoll price action sharply went downhill when both the existing home sales AND the Philly Fed index from the U.S. badly missed expectations. What’s more, concerns on the possibility of a debt contagion in the euro zone escalated.

Oh, and have I mentioned that Morgan Stanley, a big player in the banking industry, downgraded its global growth forecast? It’s no wonder traders dumped the comdolls in favor of its low-yielding counterparts!

Not all traders shifted their money to currencies though. On Friday risk aversion in markets got so bad that gold, a favorite safe-haven, reached new record highs at $1, 8880 per ounce. At the time the comdolls continued to take hits in markets and fell for the second or the third day in a row against the dollar. In fact, investors even dragged USD/CAD back above 1.0850 after the positive Canadian CPI report was released. I should know – my adjusted stop loss on my USD/CAD trade got hit!

Whew! Last week was definitely a roller coaster ride for the comdolls! Will next week be as eventful? Do you think that gold will reach $2,000 before the month ends? Or will risk appetite pave the way for some correction in our charts?

I can’t wait to hear what you guys think! As always, you know where to reach me:
@Happy_pip Twitter
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Happy Pip Comdoll Corners

Till tomorrow for my best comdoll setup!

Happy time