Closed Open Orders: 2009-12-14 21:06
Hey fellow forex traders! It looks like I have to close my open AUDUSD short order since the pair has been edging farther and farther away from my entry point. Last week, Australia printed strong employment figures, causing the AUDUSD to shoot up. Today, the RBA announced that they’re leaving the door open for further rate hikes, giving the Aussie more fuel for its rally. Besides, volatility is expected to tone down for the next couple of weeks since the yuletide holidays are fast approaching. Oh, how time flies! I haven’t even finished my Christmas shopping yet!
Also, have you heard the latest Gossip Girls news? Apparently, they have a casting call out for a for a 16-year old boy… Could Eric be getting a new boyfriend?!?
Trade Idea 2009-12-08 21:59
Before I begin with my analysis, let me just shout-out a big thanks to Big Pippin over there. This trade idea was inspired his daily chart art!
I noticed that the AUDUSD pair has already broken below the long-term rising line (which was formed since March this year!), implying that the uptrend might be over. In addition, I spotted a head and shoulders formation on the daily chart and the pair is inching closer towards the neckline. If the pair breaks below the neckline, then the reversal is confirmed!
I’ll be shorting this pair below the psychological 0.9000 handle and beyond the previous lows around 0.8950. In case of a fake out, I’ll set my stop loss above the neckline, which would be roughly equal to the pair’s average daily pip movement. My stop would also be beyond Monday’s low.
Looking at the fundamental side of things, we have been seeing a lot of pro-dollar movement this past week. Risk aversion was back in play yesterday as some businessman from Dubai posted a loss of $3.5 billion dollars. In addition, Fitch downgraded Greece’s credit rating, sparking fears that the same might happen to other European countries. Will this sentiment continue over the next couple of days?
Australian employment data will be released tomorrow and it’s expected that only 5,300 jobs were added to the economy last month. Traders may focus on the unemployment figure, which is expected to rise to 5.9%. Now, if the report comes out worse than expected, it may just provide enough juice for my entry order to get hit.
I’ll also be on the lookout for gold trading, which has dipped the past few days. I am aware however, that investors may take this opportunity to buy at a cheaper level, so if gold suddenly starts to surge higher, I will have to adjust my trade accordingly.
Speaking of gold, the holidays are just a couple of weeks away so I’m feeling the rush. Time to go gift shopping… What’s a nice present for a guy who’s into… me? Hah!
Anyhow, back to my trade idea. Here’s what I will do:
Short at 0.8940, pt at 0.8800, stop at 0.9070. I’ll risk 1% of my account on this trade.
This content is strictly for informational purposes only and does not constitute as investment advice. Trading any financial market involves risk. Please read our Risk Disclosure to make sure you understand the risks involved.