Comdoll Weekly Replay (November 7-11, 2011): Best Setup for the Week

Best Setup of the Week

As it turns out, AUD/USD made the biggest move for the third week in a row! But the best part of it is that I managed to catch part of that move. Yay me!

Remember my trade idea the other week when I shorted AUD/USD at a Fib thinking that a head and shoulders pattern was forming? I realized that I managed to catch a nice top on that one but I closed too early when I thought the pair was moving sideways.

But oh! Look at what could’ve happened if I held on to that trade for another week!

AUD/USD Setup

Man, I shouldn’t have let that range spook me out of what could’ve been a 300-pip win! I could’ve even added to my position when price busted through the 1.0300 mark. Had I used a 150/1/1 STA on this one, I could’ve scored a 3:1 trade.

Then again, I’m still patting myself on the back for catching at least a third of the move. Next time though, I’ll work on managing my trade better.

Got any tips for me you’d like to share? Send ’em through any of these accounts or through the comment box below.

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What Moved the Comdolls Last Week?

Among the commodity-related dollars (comdolls), it was the Loonie that started the week on a strong note. Though there were no economic reports released from Canada, the Canadian dollar was boosted by a rise in oil prices. Meanwhile, the Aussie and the Kiwi traded on tight ranges despite the release of mixed job ads and construction index reports from Australia.

Trading on a tight range became a norm for the comdolls, at least until the middle of the week when the comdoll bears stepped up their game. You see, concerns on the possibility of Italy asking for a bailout package hit risk appetite hard, which took its toll on the high-yielding comdolls.

Of course, it didn’t help that China also released an onslaught of disappointing reports during that day. We saw China’s CPI, retail sales, and even its trade balance reports print weaker than what market geeks were expecting, which suggests that the world’s second largest economy might be facing a slowdown in economic growth. Heck, the Aussie bulls barely paid attention to Australia‘s better-than-expected employment figures!

comdolls.png

Good thing the comdoll bulls were able to hustle some muscle by the end of the week after the euro zone officials found a way to ease market fears. Greece ended up appointing a new Prime Minister, while the Italian Senate speeded up Silvio Berlusconi’s resignation by approving an austerity package. If you recall, the approval of an austerity package was one of Berlusconi’s conditions for his resignation.

The rise in commodity prices also helped the comdolls pare their losses. Gold futures rose for the first time in three days last Friday, while oil futures hit a three-month high above $95 per barrel.

Overall though, it was only the Loonie that capped the week positive against the dollar. USD/CAD ended the week 64 pips lower than its open price, while AUD/USD registered a 98-pip drop at 1.0285. NZD/USD managed to climb from its intraweek low of .7732, but it still closed with a 92-pip loss at .7863.

The question is, will the comdoll-lovin’ last until next week? Many of my trader friends are still concerned over the threat of debt contagion in the euro zone, but some of them are also saying that the risk aversion is a good thing for the comdolls since the rising commodity prices will most likely give them a lift. I’m not too sure about that though. But what do you think? Will we see the comdolls gain some more, or are we in for a correction?

@Happy_pip on Twitter
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Hope you’re enjoying your weekend!

Happy time