I’m still feeling the rush from all those shopping sprees during the Thanksgiving holidays so I’m keeping my eyes locked on a couple of potentially good forex deals on EUR/AUD and AUD/JPY. As Forex Gump mentioned, there are a bunch of top-tier catalysts from Australia this week so that’s why I’m paying extra close attention to AUD pairs.
I’ve switched to a bullish bias on the Aussie after the RBA shifted to a less dovish stance in last month’s policy statement, as this suggests that they’re no longer looking to cut rates anytime soon. In addition, news that the IMF has granted the Chinese yuan reserve currency status could have a positive impact on China’s economy and Australia’s raw material commodity exports to the country.
I’ve already got a short GBP/AUD forex position goin’ on quite well so I’m making some profits on my bullish Aussie bias. I still think the upcoming releases could give it another push higher so I’m looking to diversify with other counter currencies. Here’s what I’ve got on my watch list:
For EUR/AUD, I’m seeing this descending channel that’s been holding for nearly a month already. Price just bounced off the resistance and looks ready to make its way to the bottom but I’m not comfortable with a countertrend play, so I’d rather wait to short at the top of the channel if volatility allows.
Aside from the AUD events, we’ve also got the ECB monetary policy decision lined up and forex analysts are already bracing themselves for additional stimulus measures. However, these expectations may have been priced in way too long already so a “buy the rumor, sell the news” scenario might occur, possibly allowing EUR/AUD to bounce back to the channel resistance before resuming its slide.
I’m also watching this rising trend line on AUD/JPY, waiting for a chance to hop in on a pullback. Stochastic is already indicating overbought conditions anyway, which suggests that buyers might take a break and allow sellers to take over for a while. I’m eyeing a potential long entry around the 89.00 major psychological level since we’ve also got a few medium-tier reports from Japan lined up.
What do you guys think of my forex trade setups? Am I about to get left behind by these strong trends or do you agree that I should stay patient in waiting for corrections? As always, I’d love to get your feedback on my ideas!
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