AUDUSD Trading Strategy: Following the Yuan

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AUDUSD Technical Analysis

The People’s Bank of China (PBOC) has devalued the Yuan against the US Dollar (USD) to combat its economic downturn following a deep plunge in the stock market.  By devaluing the Yuan it will be cheaper to import goods from China. Although there were many opinions why the PBOC took the action they did we believe it is to boost the weakening economy. We have updated all our subscribers when the PBOC made the fix, which took out our trades at the entry. We are extremely fortunate not to be in the market as we are certain many technical strategies were distorted. The PBOC actions are presenting us with a technical opportunity in AUDUSD.

AUDUSD Weekly Chart

Please click on the chart to enlarge:

AUDUSD Weekly Chart 11/08/15

AUDUSD Weekly Chart 11/08/15

AUDUSD painted a reversal pattern at the weekly close but a dip lower was required in order to affirm the technical entry, which was delivered in today’s session. The protective stop is required to be placed below the daily low, ensuring a relatively tight stop bearing in mind this is a weekly chart. The positive divergence is not fully in place, which is why are unlikely to target the maximal target for the expected reversal (0.8072).  Instead we are opting for 0.7600, which is slightly above the resistance at 0.7588.

As this is a weekly chart the gains could very well materialize any time this week or next week when the weekly session closes. The possible fundamental triggers for gains in the Aussie could very well be the upcoming data from China overnight (Industrial Production) or the Greek vote on Wednesday’s session.

The reason why we are issuing the trade alert ahead of the daily close is to enjoy the positive interest and due to the fact this is a weekly entry that does not necessarily abide the daily chart rules and can be entered at any time during the week . There is a possibility AUDUSD will re-test 0.7241 before reversing higher.

AUDUSD Trade Alert Details

AUDUSD long at market price (0.7299)
Take profit: 0.7600
Protective stop: 0.7146
Risk Ratio (RR): 1 : 2.16
Estimated duration: 21 days

12/08/15 UPDATE: AUDUSD s trading at 0.7380 at the time of this writing.

Please click on the chart to enlarge:

AUDUSD Weekly Chart 12/08/15

AUDUSD Weekly Chart 12/08/15

We are closing 20% of the long trade at market price.

The PBOC acted again despite its remarks it will not devaluate the Yuan for a second time. Our AUDUSD long trade survived the market reaction.

16/08/15 UPDATE: AUDUSD is trading at 0.7373 at the time of this writing. As we wish to initiate a new trade in crude oil should the market allow us we are closing 10% of the trade at market price and shift the protective stop to the entry. We would have preferred having a greater distance from the market but the RBA minutes is likely to determine the trend in the Aussie.

20/08/15 UPDATE: AUDUSD triggered the protective stop at the entry. We have liquidated fair profit from the trade and enjoyed positive interest at the rollover.

AUDUSD Trading Strategy: Following the Yuan

As AUDUSD long trade is closed this page can  now be accessed by all traders. Open trades are restricted to members only. We have been providng trade alerts in the Forex market since May 2014.
AUDUSD Trading Strategy: Following the Yuan

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AUDUSD Trading Strategy: Following the Yuan

                                         AUDUSD Trading Strategy: Following the Yuan
AUDUSD Trading Strategy: Following the Yuan
                                             AUDUSD Trading Strategy: Following the Yuan

AUDUSD Trading Strategy: Following the Yuan