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Trade Canceled: 2013-11-21 03:51

Bummer! I missed the boat on this AUD/USD short! As it turns out, the retracements were shallow for this particular pair, as the dollar was lifted by strong U.S. retail sales reports and the Aussie was weighed down by weak Chinese PMI.

audusd

I should’ve zoomed into the 1-hour time frame to see that a smaller retracement play was in the works and that the pair was finding resistance around the .9400 area. Too bad I was waiting to short at .9500 based on the longer-term Fibs on the 4-hour chart.

I guess I’m not alone in this one, as some of you have commented below that you were also waiting for the test of the 50% Fib level. For those who were gutsy enough to jump in around .9400, congratulations!

The question now though, is whether I should keep my bearish bias or not. Based on the feedback I’m getting, some believe that this pair is still good for a longer-term upside move.

As for me, I think I’ll just wait for more confirmation from the markets and possibly jump in a short trade if the actual neckline of the head and shoulder pattern breaks. Do you think that’s bound to happen anytime soon?

Trade Idea: 2013-11-19 22:05

Is it just me or is a head and shoulders chart pattern forming on AUD/USD’s 4-hour time frame? The pair has just pulled up from its sharp dive from .9750 to .9300, and appears ready to retrace to any of these Fib levels:

audusd

In particular, the 50% Fibonacci retracement level might be a strong resistance level since it lines up with the .9500 major psychological mark and an area of interest. However, I’m seeing a bearish divergence forming right on the 38% Fib level, which could mean that Aussie bears are ready to push the pair back down.

As for fundamentals, we might see a little bit of dollar buying if the U.S. retail sales report comes in much stronger than expected. Other than that, the positive sentiment for the Aussie seems to be fading, as data from Australia hasn’t been very impressive lately.

What do you think of this trade setup? Should I wait for a higher pullback to .9500 or enter at market? Or should I stay out completely since I have a short AUD/CAD trade open? Looking forward to your feedback!

 

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