What’s up, comdoll buddies? I’m looking at another potential short comdoll play with this falling channel resistance bounce on AUD/CHF. Maybe it’s time to hop in at market?
Short AUD/CHF Idea
I’ve been watching the downtrend on AUD/USD for quite some time but I’ve been reluctant to take any dollar trades lately, so I’m turning my attention to the franc instead. After all, this lower-yielding European currency has acted as a safe-haven proxy as geopolitical uncertainties loom on the dollar and yen.
On the flip side, the Aussie could continue to get bogged down by falling iron ore prices on expectations of lower demand in China. Yesterday, the world’s second largest economy and Australia’s trade BFF reported downbeat figures in industrial production, fixed asset investment, and retail sales. Yikes!
With that, I think AUD/CHF could be ready to resume its slide back to the falling channel support around the .7200 handle or at least until the latest swing low at .7270. I’ve already got a short CAD/CHF trade open but I’m considering just locking in whatever gains I had after the recent developments between Saudi and Russia.
Also, I’m gonna wait a bit for the release of the RBA meeting minutes to see if the pair either gains more bearish momentum or if it makes a small pop higher back to the channel resistance and 61.8% Fib, which should give me a slightly better entry level. I’ll keep y’all posted when I hop in, but here are the entry areas and exit levels I’m looking at:
Short AUD/CHF around .7400-.7450 area, stop loss at .7525, profit target at .7225. This should give me roughly a 2:1 return-on-risk for 0.5% of my account on the line. I’ll also be ready to trail my stop to entry once price tests the .7270 swing low.
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See also: Q1 2017 Trading Performance Review