Best Comdoll Setup of the Week:
Welcome to another trading week, my forex buddies!
I don’t know about you, but with the way the comdolls got heavily sold off last week, I had a hard time picking out which setup could have yielded the most pips! In the end though, the crown remained with AUD/USD after I saw a heartbreaking setup that could’ve yielded a total of 600 pips. Boo!
Right at the start of the week AUD/USD practically shouted a sell signal with a bearish divergence and an overbought Stochastic signal around the 1.0300 major psychological level. If you recall, most of the high-yielding currencies had just experienced a sudden boost in demand when Italy and Greece showed progress in their governments before the previous week ended. I guess the happy vibes didn’t last for long, huh?
If we had shorted at 1.0300 early in the week and placed a 100/1/1 STA on the trade, we would’ve gotten a decent 2:1 reward-to-risk trade. But wait – there’s more! Since many Aussie traders including my closest forex buddies closely watch AUD/USD’s parity level, we could have simply placed our profit target at the major handle. If we had closed ALL our positions at 1.0000, we would’ve gotten a total of 600 pips for only a 100-pip risk! A 6:1 reward-to-risk trade bargain isn’t so bad, dontcha think?
Too bad I was watching my USD/CAD trade at the time! Looking at the charts we could’ve also caught at least part of the move by entering at the divergences and support and resistance levels at 1.0200 and even at 1.0100.
But hey, at least we now know that AUD/USD can still move strongly in one direction even when it usually ranges in the middle of the month. In addition, we now know from last week’s price action that 1.0000 can still hold like a boss especially with the first few tests.
Do you see other comdoll pairs that could’ve taken AUD/USD’s crown? Some of my friends pointed out some setups on comdoll crosses, but they forgot to tell me the details. Do you have a better setup than AUD/USD? Tell me all about it! I’ll be right here on one of these pages:
Chips, Dips, and I can’t wait to get my hands on some PIPS!
What Moved the Comdolls Last Week?
Last week was definitely one of those one-directional ones, peppered with some strong pip action here and there. Unfortunately for the comdolls, risk sentiment just wasn’t on their side during those days. Any guesses on what kept risk appetite at bay?
Did I hear someone say euro zone debt problems? *Ding ding ding ding* You are absolutely correct!
But before we all point our fingers at the usual culprit Greece, y’all should know that it was actually the seemingly too big to fail nations that caused a lot of ruckus. You see, both Italy and Spain held bond auctions last week and those bond yields looked pretty nasty. It didn’t help that credit rating agency Fitch emphasized the possibility of a euro zone debt contagion. Talk about stating the obvious, huh?
There weren’t a lot of reports released from the comdolls then, leaving them with nothing much to hang on to. With that, the Aussie, Loonie, and Kiwi got trampled on during the strong safe-haven rallies.
Did you manage to catch any pips from those big moves we saw last week? Don’t be shy to let me know because that trade you took could be the best setup that I spotted for last week!
Holler at me through any of these pages:
Hope you’re enjoying your weekend!