Riding the AUD/USD Downtrend: Trade Closed

Trade Closed: 2012-05-28 02:01

Argh, that was so close! Instead of falling all the way to the .9700 handle as many of us had hoped, AUD/USD shot up and tested the .9800 handle instead!

As it turned out, speculations of more monetary easing from China boosted the Aussie and Kiwi last Friday. You see, growth in China is good news for Australia as the commodity-producing country relies heavily on Chinese demand. And here we thought that we’ll actually hear more about a Grexit over the weekend. *sigh*

AUD/USD Trade Closed

My adjusted stop loss at .9800 probably would’ve avoided getting hit last Friday, but it was no match for the weekend gap that we saw at the start of the week. Heck, the pair is even finding support at .9850 as I’m writing this!

Oh well, it was a good idea at the time. But hey, let’s all give happy snaps to all those who profited from AUD/USD last week! You guys did great! As for me, I’m now thinking that I should’ve stuck to my trading resolutions and closed the trade before the weekend. Can’t blame a girl for trying though!

Anybody out here who also took profit from the Aussie? How about those who held their trades open over the weekend?

Trade Adjustments: 2012-05-25 01:51
Now that the weekend is fast-approaching, I decided to make a few adjustments on my trade in order to manage my risk. I moved my stop to my .9800 entry and cancel my short order at .9820 for a risk-free trade over the weekend.

AUD/USD Trade Adjustments

Although I mentioned in my trading resolutions that I wouldn’t hold any trades open over the weekend, I just thought I’d hold on to this trade since I believe that fundamentals still haven’t changed and that AUD/USD has enough reason to head further south. The adjustments I made would act as a good compromise, wouldn’t they?

Right now, I’m up by roughly 70 pips and AUD/USD seems to be forming a bearish pennant, which is hinting at a potential breakdown. That means I’m close to a 1:1 return on my open trade! It’s too bad it didn’t reach as high as my other short order at .9820 and I could tell from the comments below that some of my comdoll buddies were watching that level, too.

Stay tuned for my updates though! Who knows? This pair just might dip to my PT during today’s U.S. session. I’m keeping my fingers crossed!

Trade Update: 2012-05-24 10:21

So far so good! Just when I thought that I had missed AUD/USD’s price action, the pair went up to trigger my first position!

AUD/USD Trade Update

AUD/USD dropped to the .9710 area during the early London session at the release of the euro zone’s weak economic data, but the pair slowly made its way back up as a bit of optimism hit the markets.

Unfortunately, the worse-than-expected durable goods data from the U.S. is weighing on risk sentiment. Will the report set the tone for risk sentiment for the rest of the day? The pair found resistance almost right at my .9800 entry price, and it looks like an overbought Stochastic signal is also supporting a short trade.

I’ll be closely watching my trade in case it breaks the falling trend line on the 1-hour chart. But if price action goes our way, then I’m planning on either setting my stop to break even or taking profit at .9700.

Anyone here in this trade with me? Maybe you could give me advice on whether I should add another 0.25% to my position since it isn’t likely that the pair would touch my second order at .9820. What do you think?

Trade Idea 2012-05-24 03:11
After trading USD/CAD and NZD/USD ranges for the longest time, I’m finally giving AUD/USD a shot!

As we all know, the Aussie has been weakening against the Greenback since the start of the month thanks to weak commodities and growth concerns in the euro zone. AUD/USD is down 5.69% as of writing and even touched new 2012 lows yesterday!

I’m thinking that I can still jump in AUD/USD’s downtrend since nothing much has changed in Australia‘s fundamental landscape. For one, concerns on Greece and the euro zone are likely to escalate since we’re still not seeing concrete action from the European leaders.

Then, China’s HSBC PMI signaled more contraction in the manufacturing industry at 48.7 (vs. 49.3) in May while gold prices are still near its steep lows.

AUD/USD Trade Idea

On the technical side, I’m looking to jump in on the trend by entering at the .9800 level. That area not only coincides with the falling trend line, but it’s also lining up with the 38.2% and 50% Fib levels. Aside from that, stochastic is also in the oversold territory!

I’m not sure the pair will retrace all the way up to the 50% Fib, so I plan on scaling in my positions. I put 0.25% on the .9800 major psychological handle and another at .9820 in case we see comdoll strength before the U.S. session. I set my first PT at yesterday’s lows (.9700 area) and my stop loss at around .9875.

Here are the details.

Short AUD/USD at .9800 and .9820, stop loss at .9857, target at .9700.

Plannin’ on trading the setup with me? Make sure you read our risk disclosure!

What do you think of my setup? Is waiting for a retracement a good idea, or should I take hints from my previous trades and just jump in? You know where to catch me!

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Good luck in your trades this week, buddies!

Happy time

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  • iovios07 papadopoulos

    Happy Pip very nice call this one. I got triggered at .9800 (demo) and leting it ride all the way down. Can you inform me if you keep a journal of all of your trades (wins – loses) and could you share?

    • happypip

      Nice! I really hope it falls all the way down, but it appears to be consolidating at the moment. All my trades are pretty much in this blog so feel free to check out my past entries! 

  • Albert Nel

    Closed my remaining position at NY close! Pheeeew :D

    • happypip

      Good for you! How many pips were you able to lock in? 

  • Luu T Trang

    very good!!!
    It’s a pity that I was not home to make my short at 9800.
    I’m just holding my shorting at .9770, quite early but it’s still working good ^^

    • happypip

      Cool! Did you close already? It looks like this pair is back at that .9770 resistance area again!

      • Luu T Trang

        yes, I did close it already at .9730 yesterday. fast shot ^^
        today It only hover under .9800 and above .9720, quite hard to predict where will it go. 
        BTW, I quite agree with you to continue shorting our lovely Aussie, but now… to hold on over weekend, hard to say anything, It seems to hesitate something, want to a rising back.

        • happypip

          Mannn, I should’ve listened to you and closed my position entirely! Could’ve ended up with a few pips in profits in that case :( 

  • Adrian Taylor

    I kept my trade open over the weekend and woke up to a nasty suprise this morning, didn’t see that one coming.

    • happypip

      Yeah, me too :( I hope you moved your stops though! Let’s bounce back this week, yes? 

  • ML

    Do you think 0.9820 will be triggered? 

    • happypip

      I sure hope so. The pair seems to be stalling around the .9800 area so a quick spike to .9820 is still possible. Let’s see how it goes! Are you in this trade as well?

      • ML

        Yes, but I only enter a short order only @ 0.9820. I did not enter a short order @ 0.9800. Lets hope that 0.9820 will be triggered! 

        • happypip

          Fingers crossed! :)

          • ML

            0.9820 will not be triggered. The highest the currency pair has hit is 0.9815. What a close miss!

          • happypip

            Yipes! Just a few pips away! 

  • Laice1

    Hiya!  Missed this one :( was doing some o/t good call.  Best not to add, go with your current position, instead of breakeven do a trailng profit, price currently below daily pivot, your target is near S1 on my charts…..Good Luck!

    • happypip

      Aww that’s too bad. Thanks for the advice! 

  • Etrade360

    It’s down -6%, so i expected long (my trade)

    • happypip

      It does look extremely oversold and there’s a bit of divergence on the 1-hour chart. It’s just that fundamentals are favoring an AUD short at the moment, so I’m going with the overall trend. Are you still in a long trade? Where’s your PT? :)

  • Tonyro44

    I just couldn’t wait so I got in @ 9770 and got out @ 9740. The pair never made it to 9800. I will now get a good night sleep and place sell on it again @ the 9800, but if it don’t cross it I will hit again a little below it. Your set up is great i just lack patience sometimes, and go for a semi trade. 

    • happypip

      Heyyy, but you still managed to grab pips so congrats! I do have my share of impatient moments too, and I think that’s just part of being human. What matters is how we’re able to stay disciplined and manage our risk properly. That comes with a lot of practice, I believe. Good luck in your next trades! :)

  • Granticus_Maximus

    The daily stochastic is still oversold, but it’s looking like it’s starting to peek its way out and the RSI is on its way up out of oversold on the daily as well. 1hr and 4hr charts show overbought and it just bounced off the 23.6 fib level just now from the 27 April high… I’m hoping for it to only be a retracement and for it to head back down from now, but who knows! :| …where do you see it headed?

    • happypip

      It seems to be headed upwards, at least for the near term, since it has been extremely oversold for the past couple of weeks. Who knows, this could be a giant retracement though. Gonna trade this pair this week?

  • Stevenuzzo

    Bought yesterday at 97.29 closed trade at 97.89 +60 pips ;)
    Sold today at 97.94 and going to ride it back down
    SL 98.24
    TP1 97.40
    TP2 97.10

    • happypip

      Nice job playing that range! Hope it goes our way for the next few hours!

      • Stevenuzzo

        closed the trade just before fridays close at .9760…and glad i did! +34 pips
        Sold now at .9880 (6:15 est 5/28)
        SL .9910
        gonna sit and wait out my TP….

        • happypip

          Congrats on your win last week! How’s your current trade doing?

  • Etrade360

    my trading zone between -6%(0.9797) and -7%(0.9693). I trade daily trend so any prices in that zone i buy all.

    • happypip

      Oh, that’s interesting. Why did you pick those percentages? I’m curious. Haha

      • Etrade360

         Compare OpenPrice of monthly bar. With intraday compare OpenPrice at 00:00 GMT, u see average between 0.5%-0.75%, 1% is strong, 1.25%-1.35% is wide.  The price runs max range then have to swing back, if ur swing trader regarding those number to place the trade. Some time i saw GBPJPY CADJPY run up to 2%.
        I’m lazy take screenshot my chart but i will do.

  • Anto.gj

    Josh, I missed it :(

    • happypip

      Better luck next time!

  • ML

    HappyPIPS – > 
    Can I find out if this trade recommendation is still valid? Is it possible to wait for 9800 or 9820 to be triggered? 

    • happypip

      Hey man! It’s tough to tell for now, but it looks like the pair is consolidating in a range with resistance around the .9800 area. It hasn’t actually reached .9820 yesterday so it might be unlikely that it’d test that level today, unless we see any shifts in market sentiment though…

  • Pjsalda

    Hi, i entered also and was triggered. I closed manually the position for profit.

    • happypip

      Oh good for you! How many pips were you able to grab?

  • ML

    Is the entry point  0.9800 and 0.9820 too far away? 

    • happypip

      Do you think so? I like that entry because of how the technicals line up, but it does look like it’s falling now. Let’s see how it pans out during the U.S. session, could have some room for a quick bounce to my short orders. How are you playing this one? :)

      • Charliechai86

         when is the U.S. session start???

        • happypip

          It’s going on right now! Started at 8:00 am EST/1:00 pm GMT.