Hmm, it looks like the odds are stacking against my trade idea. If you remember, my AUD/USD short is largely based on a bearish bias towards the Greek PSI announcement.
But now that Greece has already announced an 85.8% participation rate for its bondholders and AUD/USD still hasn’t gone up to 1.0700, I’m thinking twice about entering the market.
First of all, it’s in my 2012 trading resolutions not to leave a trade open over the weekend. Not only that, but it also looks like the Aussie bears aren’t too keen on dragging the currency lower. A couple of hours ago Australia printed a worse-than-expected trade balance report, but AUD/USD only dropped by a couple of pips before testing the 1.0650 handle again.
And if that’s not enough to make me skittish about shorting the Aussie, today is also an NFP Friday!
Oh well, it looks like I might not follow up my NZD/USD win with another one for this week. But hey, there’s always next week, right?
How about you? Has anyone shorted (and made profits) from AUD/USD this week? I’d love to hear from you!
Good luck trading and happy weekend, forex fanatics!
Trade Idea: 2012-03-08 2:58
My, oh my! With so much going on in the markets these days, it’s really tough to pick a pair and a direction. For one thing, the upcoming decision on Greek bond swaps could set off fireworks later on as it could decide whether Greece will default on its debt or not.
You see, this particular issue has been one of the major themes driving the markets lately and it’ll be interesting to see how it will affect risk sentiment.
So for my trade idea this week, I decided to stick to the basics of fundamental analysis in picking which comdoll pair to trade.
I noticed that the Aussie has several bearish factors dragging it down lately, such as China’s growth forecasts downgrade and the RBA’s not-so-upbeat rate statement. To top it off, gold has been selling off like crazy lately and that can’t be good for AUD/USD.
As for technicals, I’m looking at a potential retracement on the 4-hour time frame. As you can see, the former support area around 1.0650 to 1.0700 lines up with Fib levels so I will probably set my short orders there depending on the outcome of the Greek PSI announcement.
Here’s my plan:
Short AUD/USD at 1.0700, stop at 1.0775, PT around 1.0500
Do you think this trade idea will work out? Or should I stay out completely what with the NFP coming up? As always, you know where to reach me!
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