Good morning, friends!
After taking into consideration all the signals on the lower and higher time frames, I decided to take a rain check on AUD/USD.
If you remember, I pointed out before that the 1-hour chart is hinting that the “breakout” on the 4-hour chart is a false one. Well, it turned out to be both right and wrong. You see, the pair rose a few candles after we spotted the bullish divergence, but the pair also fell all the way to the 1.0250 handle a few days later.
If I had bought or shorted the pair, I think I would’ve been stopped out either way! Good thing I decided to stay by the sidelines. Maybe Dr. Pipslow’s articles on being patient are finally rubbing off on me.
I might have missed a pretty good move on the pair this time, but that doesn’t mean that I won’t come back with a vengeance next time! Who knows, maybe there will be another breakout setup waiting for our attention!
How about you? Were some of you able to take advantage of the price action? Don’t hesitate to share with us!
Trade Update: 2012-04-19 11:00
Are we seeing a breakout on AUD/USD, or are we looking at a false break?
Just when I was about to pull the trigger on AUD/USD, I zoomed in on the 1-hour chart for confirmation of the “breakout” that we’re seeing on the 4-hour chart. Lo and behold, I spotted a potential deal-breaker!
On the chart above we can see a bullish divergence and an oversold Stochastic signal, which popped up while the pair is near the 1.0350 minor psychological handle. Not only that, but it also looks like the most recent candle is about to close as a hammer!
Will 1.0350 become a support-turned-resistance level, or will the pair go up to test the falling trendline of the triangle? Ack, I should probably wait for more signals.
I’m baaack! I may have lost my NZD/USD trade last week, but that doesn’t mean that I can’t start a new winning streak!
This time around I’m turning my attention to AUD/USD, which is currently showing a nice symmetrical triangle on the 4-hour chart. I just hope that I’m around when the Aussie bulls and bears finally reach a decision!
If you have marked the levels on my Comdoll Trading Kit this week, then you’ll know that the previous week and WATR levels are looking like good targets in case the pair breaks out. Right now both levels are presenting reward-to-risk ratios of 1:1. Probably a good idea to wait, huh?
I hope it breaks to the downside though. At least then the move would be supported by the RBA’s surprisingly dovish statements early this week as well as the disappointing NAB business confidence report we saw a few hours ago. Not only that, but I’m also not comfortable buying the Aussie when markets are so jittery over Spain’s bond auctions and contagion concerns in the eurozone.
How about you? Anyone out there has any plans on trading this pair? I’m still thinking if I should still trade it if it breaks to the upside, or if I should just wait for a downside break. Any tip would be much appreciated!
Oh, and don’t forget to check out our risk disclosure, too!
Chips, dips, and lots of AUD/USD pips!
Good luck in your trades this week, buddies!
Other Popular Articles:
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.