Trade Closed: 2011-07-22 4:37
I guess risk appetite was just too strong for this technical setup! Though we saw weak economic reports from Australia yesterday, the surge in appetite was enough for the Aussie bulls to launch a fresh attack against the dollar.
As it turned out, the comdoll bulls got a boost after the euro zone leaders announced improvements in the region’s debt situation. Of course, it also doesn’t hurt that the dollar bears are busy selling the Greenback! You see, aside from printing another disappointment in initial jobless claims, more and more traders believe that a deal on the U.S. debt ceiling won’t be reached in time for Obama’s deadline today.
Unfortunately, the turn of events didn’t turn out well for my trade. After gaining by almost 50 pips, AUD/USD found support at the 1.0700 area just near Wednesday’s low. Goodness, it even shot up way beyond my stop loss!
Good thing I was able to cut my losses early. I closed the trade as soon as I saw that price broke Wednesday’s high and the top weekly ATR at 1.0768. My account took another small dent this time, but I’m pretty happy with it considering that it would’ve eventually hit my stop loss. Phew!
So sorry to break it to you friends, but we have another loss this week. A smaller one perhaps, but a loss all the same. Don’t worry, I’m not feeling to down about it since you guys have been cheering me all along. We’ll try again next week!
If you have any thoughts you’d like to share, don’t hesitate to put your two cents on the boxes below, or you can contact me through my Twitter, Facebook, and even my Comdoll Corners. All thoughts are very much appreciated!
Till this weekend for my Comdoll Weekly Replay!
Trade Update: 2011-07-21 7:22
Hey folks! I finally picked a side on the AUD/USD range and pulled the trigger after waiting for a bit of retracement. Can you guess which side I took?
If you answered “Short at the top!” then you’re absolutely correct! Brownie points for you!
I was originally planning to short at 1.0800, right at the top of the range, but AUD/USD just didn’t make it that high. Price dropped after finding resistance at the top of its average weekly range (1.0770) just when China released disappointing PMI figures. Apparently, manufacturing conditions are starting to contract in China as the index fell from 50.1 to 48.9. Yikes!
And let’s not forget that the RBA did talk about keeping rates on hold for the rest of the year and maybe even going for a rate cut. If you didn’t get a chance to read the minutes of their latest monetary policy meeting, you probably didn’t read Pip Diddy’s daily forex fundamentals on Australia that day. Tsk tsk…
Anyway, I didn’t manage to catch the immediate reaction to the report, so I just patiently waited for a retracement to get in at a good price.
I put up some Fibs on the 15-minute chart and noticed that today’s open price was sandwiched between the 50% and 61.8% Fib levels. Plus, the 1.0750 minor psychological level was also nearby so I decided to short there.
I also adjusted my stop to 1.0825, which is 75 pips away from my short entry point. I will still be aiming for the middle and the bottom of the range for my profit targets. If the U.S. debt-cutting proposal pushes through, traders might show some love for the Greenback again and take AUD/USD all the way down to my targets. Fingers crossed!
Here are the exact details of my trade:
Short AUD/USD at 1.0750, stop loss at 1.0825, pt1 at 1.0650, pt2 at 1.0550. I’ll lock in half my winnings at the first pt and move my stop to breakeven.
Do you think this setup is finally gonna give me some pips from AUD/USD? Let me know what you think through Twitter, Facebook, my Happy Comdoll Corners, or the comment box below! There are plenty of ways for you to reach me so now is not the time to be shy!
Looking forward to hearing more of your thoughts!
Trade Idea: 2011-07-19 7:22
Happy morning, friends!
I know I haven’t been very lucky on this pair lately, but hey, we have to take the good setups that come our way, right?
Early today I spotted a pretty solid range on AUD/USD’s 4-hour chart. Heck, I even planned on going long on the pair! There was a bullish divergence and an oversold stochastic signal, you see. Unfortunately, price already shot up way above my potential entry point (1.0550), which was just around yesterday’s low.
This time around I’m thinking if I should short the pair at 1.0800. The level is not only a major psychological level, but it has also served as a good resistance area since April. In fact, there’s even a triple top near last week’s high!
It’s still early in the week though. There are still plenty of news reports that can send the pair in either direction.
On the bears’ side, there’s still the lingering risk aversion because of the euro zone’s debt crisis. Unless the euro zone officials present something concrete after their meeting later this week, we might see more risk-averse traders dump the high-yielding comdolls.
Of course, we can’t discount Australia‘s worse-than-expected news reports either. As I mentioned in my comdoll weekly replay last weekend, Australia struggled to hold on to its gains as the country was hit with lower business and consumer confidence. What’s more, the RBA just released a dovish statement! In its report, the RBA opted to use the wait-and-see approach on grounds of the “downside risk” on the global economy posed by the euro zone crisis.
On the other side of the chart, we can also take into account the dollar weakness that we’ve seen for the past few days. If heads in the U.S. Congress haven’t cooled enough to agree on the country’s debt ceiling soon, we might see traders flock to its major counterparts.
Other potential Aussie boosters include China’s strong GDP report last week, positive Australian reports this week, and even a potential risk appetite action if the euro zone leaders come up with something solid in their meeting on Thursday. Aside from that, gold just reached a new record high after successfully breaking past the $1600/ounce mark.
So, what do you think of my trade idea? If you’re trading this pair, which way would you go?
Don’t be afraid to share your thoughts with us! I promise I appreciate all of them! But if you’re too shy on sharing your two cents, then you can give me a shoutout on my Twitter and Facebook accounts, and even on one of my Comdoll Corners.
Looking forward to hearing your thoughts!
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