Resistance at the Weekly Open Price? – Closed Open Orders

Closed Open Orders: 2010-05-25 22:40

PoD Chart

Eww! It looks like the range broke and the pair just fell to the 0.8100 handle. Needless to say, I missed the move downwards. With the AUDUSD forming a double bottom and my trade idea invalidated, I think it’s time to close any open orders.

Trade Idea: 2010-05-24 23:05

PoD Chart

After missing out on last week’s strong Aussie moves, I’m going to try again and get in on this short AUDUSD trade.

It looks like the AUDUSD pair has been pacing back and forth inside a range for the past couple of days. There’s resistance around 0.8350 and support near 0.8190. Now, while price is still hovering at the support level, I’m not confident in going long on any AUD pairs as of right now.

Given the Australian dollar’s sharp decline in the past couple of days, I’d say that sentiment has completely shifted. Remember, a few months back, confidence among investors and the consistent rate hikes from the Reserve Bank of Australia drove the Australian dollar higher across the board.

But now, investors are starting to get nervous with all the debt problems happening in the euro zone. In addition, the RBA is starting to show hints that they would pause with their interest rate hiking ways in their next meeting. As an effect, these leveraged carry trade positions are one of the first things to be reversed, causing investors to once again purchase the Japanese yen and the US dollar.

Hopefully, economic data from the US, namely the CB consumer confidence survey, the house price index and the Richmond Manufacturing index would take the pair up to my desired entry point.

Although a new trend is developing, I remain hesitant in betting my usual position size. I’m going to wait for a retracement first before jumping in. After all, who wants to sell at a temporary bottom? With that said, I’m going to play the ranges first and risk just 0.50% of my account on this trade.

I placed my entry order at the top of the range, which coincides with this week’s open price of 0.8350. That level is also closely in line with Friday’s high and yesterday’s high so it could act as a strong resistance level. Then, I put one profit target at the middle of the range and another near the bottom.

Here’s what I’m gonna do:

Short AUDUSD at 0.8350, pt1 at 0.8275, pt2 at 0.8200, stop loss at 0.8425.

I’m feeling better right now, and I think a lot of it has to do with me doing more exercise as of late. I’ve decided to take the plunge and try out jogging! Whoever thought running around the city would become such a fad, especially in this heat! Like trading, I think it takes a lot of discipline and hard work but I think in the end, it’ll all pay off!

Thanks for reading my blog! You can check out my past trades over at MeetPips.com!

  • Babysteps

    Hi i ride this pair from 90 :-)

  • Babysteps

    Hi i ride this pair from 90 :-)

  • foricks

    Thank you again for another trade to consider. I often wonder why, with all of your infinite wisdom (compared to me), you do not trade the retracements. For example, in this trade, we both saw what looks like divergence. This morning, I took the retracement up for 160 pips (TP1, 60, TP2 100). It seemed like a safe bet. Your thoughts are always appreciated.
    Cheers,
    Foricks

    BTW, glad to hear you are taking up jogging. It takes 3 miles to burn off one of those mega chocolate treats you keep talking about :-)

  • happypip

    Hello foricks! There are times that I play retracements but, as much as possible, I try to only post those high probability trades. There are a lot of newbies here still trying to get a feel for the market, so I try to focus on those trades that they can learn a lot from.

  • foricks

    Thank you again for another trade to consider. I often wonder why, with all of your infinite wisdom (compared to me), you do not trade the retracements. For example, in this trade, we both saw what looks like divergence. This morning, I took the retracement up for 160 pips (TP1, 60, TP2 100). It seemed like a safe bet. Your thoughts are always appreciated.
    Cheers,
    Foricks

    BTW, glad to hear you are taking up jogging. It takes 3 miles to burn off one of those mega chocolate treats you keep talking about :-)

  • PipDevil

    u could’ve hit your targets if u kept your orders open! too bad! then again, that double bottom was indeed scary!

  • PipDevil

    u could’ve hit your targets if u kept your orders open! too bad! then again, that double bottom was indeed scary!