Happy morning, friends! If you haven’t bagged any pips yet this week, then here’s an inspiration for you.
Best Comdoll Setup of the Week
Just when we were warming up our trading muscles last week, the BOJ quickly shook the markets and launched its currency intervention. The move effectively dragged AUD/USD to the 1.0500 just SEVEN hours into the week!
The pair retraced some of its losses though, and presented a sweet setup on the 1-hour chart. Aside from a bearish divergence and an overbought Stochastic signal that had formed, the pair also stalled at the 1.0600 area, which is also conveniently in the 38.2% and 50% Fib levels.
If we had shorted at 1.0600 and placed a 60/1/1 STA on the trade, we would’ve entered our last position at the 1.0300 handle where a morning star and an oversold Stochastic signal had formed. If you have been practicing your STA strategy, then you’ll know that the move would’ve yielded a 9:1 reward-to-risk trade!
Good thing I was able to jump in on the move by the middle of the week! Okay, granted I was only able to get in at 1.0400 last Friday and my AUD/USD trade was based on the price action on the 4-hour chart, but it’s better than missing the whole move, right?
How about you? Got any comdoll trade ideas this week? Last week was a pretty good week for me and my friends thanks to your ideas on Twitter, Facebook, MeetPips.com, etc. so don’t hesitate to share those ideas! You’ll never know when somebody might appreciate your analysis!
Time to bag those chips, dips, and many many pips!
What Moved the Comdolls Last Week?
If you had to pick just one major theme that dominated the markets last week, what would it be? I bet you’re thinking of the euro zone debt fiasco just like I am!
Risk sentiment kept shifting around like a toddler that couldn’t sit still these past few days as news from the euro zone alternated between good and not-so-good. Higher-yielding currencies started the week on a sour note as market participants seemed unsatisfied about the rescue package that European leaders came up with over the weekend.
Things grew even worse later on when the RBA decided to cut interest rates by 25 basis points from 4.75% to 4.50%, citing concerns about their weak inflation figures. Chinese manufacturing PMI also contributed to AUD/USD’s selloff as it missed expectations and landed at 50.4 for October, down from September’s 51.2 reading.
Australia printed weak reports, namely its building permits and retail sales data, midweek and its little brother New Zealand soon followed suit. Their employment data turned out to be a disappointment, with its jobless rate climbing from 6.5% to 6.6% instead of dropping to 6.4% in the third quarter.
Canada also had its share of poor jobs data as it reported a 54K drop in hiring for October. Because of that, its jobless rate climbed a couple of notches from 7.1% to 7.3% during the month. Their Ivey PMI also missed the mark as it slipped from 55.7 to 54.4 in the same period.
Despite these bleak figures, the comdolls were able to enjoy a few gains towards the end of the week when Greece decided to ditch their referendum plan. Recall that Greek Prime Minister Papandreou threw a curveball at the euro zone leaders’ bailout plans when he announced that these proposals would have to undergo a vote the other week. But when these plans were scrapped, higher-yielding currencies such as the comdolls went on a brief relief rally.
What a crazy week, huh? Any ideas on which pair bagged the Best Setup of the Week award? I think this is gonna be a tough one!
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Enjoy the rest of your weekend!