First Trade for 2013: AUD/USD Swing Short – First Win for 2013!

Trade Closed: 2013-01-18 00:39

What a way to start the year!

After staying stuck between the 1.0550 and 1.0580 areas for a long period of time, I decided to take my cue from the Chinese data dump this week.

So when my Twitter friends and I found out that China’s GDP, industrial production, and retail sales ALL exceeded expectations, I decided to close my trade for a small profit. Remember, AUD/USD rose by almost 50 pips when China’s trade balance data surprised to the upside!

AUD/USD Trade Closed

Right now AUD/USD is a bit below my exit level (1.0549) but I think that the Aussie could see some buyers in the U.K. session once the buy-the-rumor-sell-the-news action dies down. At least I hope it does! Otherwise I would feel bad about my missed profits.

But hey, at least I stuck to my trading plan, right? A 30-pip gain (0.20% of my account) is not too bad for my first trade this year. The question is, will my lucky strike spill over to my NZD/USD trade?

How about you? Did you trade the Chinese GDP release? If you did, what happened to your trade?

Trade Update: 2013-01-11 18:45

Aaand I’m in!

Thanks to China’s better-than-expected trade balance data, the Aussie bulls got excited enough and pushed AUD/USD all the way to my entry orders at the 1.0580 area.

But will the rising channel resistance hold? Right now the 1.0600 handle is doing a great job as a resistance for the pair as it held even after the release of the slightly stronger-than-expected Chinese inflation numbers.

AUD/USD Trade Open

Only the U.S. trade numbers are due to print today, so if nothing big comes out from the euro zone, I expect the channel resistance to hold. In any case, I’m planning to watch the pair closely. I’ll probably move my stop to break even if AUD/USD reaches the 1.0500 area or cut my losses early if a big news report pops up and boosts the comdolls.

What do you think of my plan? Do you think that the 1.0600 handle will hold until next week? You’re more than welcome to share your thoughts!

Trade Idea: 2013-01-09 14:30

I’m kicking the year off with a swing trade on AUD/USD!

I’m planning to short the pair right on the 1.0580 long-term resistance level, which has been holding like a boss since August last year. On top of that, this resistance area is right in line with this week’s top WATR and the top of the channel on the 4-hour time frame.

AUD/USD Swing Trade

As for fundamentals, I’m thinking that weak data from the Land Down Under should keep this pair under the 1.0600 handle for the near term. Just recently, Australia printed a wider trade deficit and weaker than expected retail sales. Besides, there hasn’t been any significant boosts to risk appetite lately, which means that a break above the 1.0600 mark might be unlikely.

Here are the deets:

Short AUD/USD at 1.0580, stop loss at 1.0640 (above the September 2012 spike), initial profit target at last week’s low of 1.0400.

Of course I’ll be keeping close tabs on the U.S. earnings reports as these could have an impact on price action. I’ll also consider adding to my position and trailing my stop if price breaks below 1.0400.

Do you think I’ll be able to start 2013 on a good note with this trade idea? Share your thoughts with me!

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Risk disclosure

Chips, dips, and lots and lots of pips!

Happy time

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  • Albert Nel

    Hey Happy Pip!

    What a setup, it’s exactly the way I have it analyzed as well, except for WATR which I don’t use but now it seems that I should pay some more attention to it! 😉

    Good luck with this one, I’ll definitely be in with you on this one.

    Talk soon,
    Albert

    • happypip

      Thanks, Albert!

      Great to know that someone’s with me on this one. I usually use WATR levels to support possible inflection areas. You should try it on USDCAD! It’s more effective!

      Are you looking at any specific levels for AUD/USD?

      Happy Pip

      • Albert Nel

        I’ll definitely check out USDCAD, thanks!

        At the moment I don’t have a perfect price, so I’ll be watching price action in the 1.0560 – 1.0580 area. It’s the 123% fib extension of current move up, the previous high and now I know the top WATR as well! 😉

        Odds seems very high so I’m happy shorting there.

        And not to get ahead of myself, but I plan on leaving a quarter of my original position on and go for… ta-ta-taaaam: 1.0100!

        Lemme know what you think 😉
        Albert

        • happypip

          So sorry for the late response! USD/CAD has been moving sideways for quite some time but we are finally seeing some action now. I’m watching those levels as well! Good luck on your trade!

  • JR

    I wouldn’t be surprised if we saw a break above 1.06 to be honest. The trade numbers from China today and recent iron prices will support the Aussie. This opens up a pretty big profit zone all the way up to 1.08 or even 1.10. However your analysis may prove to be correct and if the channel holds, the same amount can be made on the downside to the 1.04 handle.

    • happypip

      Hmm, looks like Chinese data all came in strong but we have yet to see a breakout. Maybe AUD bulls are still asleep, haha. Thanks for the feedback and for checking out my blog!

  • krkr333

    RsI signal hit 70 but didn’t break it on the 4 hours chart

    I wouldn’t recommend to enter the trade unless it takes a movement and we see a straight bearish candle on the 4 hour

    • happypip

      Okay, thanks for the tips! I’ll keep those in mind 🙂

  • Todd Klimson

    Wouldnt touch it yet, zero confirmation either way. major support at 1.05075. I wouldnt be convinced unless Aussie hit 1.046 then I would short. Be patient on this one. Defn wouldnt short yet.

    • happypip

      Don’t you think 1.046 might be a little late though? Where is your target?

  • Todd Klimson

    Scalping it yes prob go to 1.5075. Long or short swing absolutely no confirmation yet

    • happypip

      Oh man, I wish I locked in some profits around that 1.0500 mark!

  • Todd Klimson

    Way better buy signals from USD/JPY and AUD/JPY. AUD/USd will be like watching paint dry

    • happypip

      Yeah, good point. AUD/USD ranged for almost a week before selling off!

  • Abid Ali

    China data to give $A momentum http://www.afr.com/p/markets/c

    • happypip

      Ha! Looks like you were correct about that. Did you trade this one?