FX Trading Strategy: Reverting to the Australian Dollar

[indeed-social-media sm_list=’fb,tw,pf,li,goo’ sm_template=’ism_template_3′ sm_list_align=’horizontal’ sm_display_counts=’false’ sm_display_fviull_name=’true’ sm_disable_mobile=1 ]

AUD Technical Strategy

The Australian Dollar (AUD) suffered from heavy losses in the Foreign Exchange (Forex) market as a result of the Reserve Bank of Australia (RBA) monetary policy. The RBA slashed the interest rate and left the door open for additional easing in its future meetings.

Since the RBA actions the Aussie was sold against a basket of currencies. It appears that AUD weakness may have reached a bottom on the weekly and daily charts.

EURAUD Daily Chart

Please click on the chart to enlarge:

EURAUD Daily Chart 12/05/16

EURAUD Daily Chart 12/05/16

We have already spotted the reversal pattern in yesterday’s session. In light of our current exposure we have refrained from entering Euro Aussie. The cross has re-tested its daily resistance in today’s session, which may reduce the possibility of an additional re-test. We are aware economic data is due from China over the weekend, which is priced into the daily chart. We hope 1.5565 will prevent any attempts to drive the price higher while 1.5600 is the key level.

AUDUSD Weekly Chart

Please click on the chart to enlarge:

AUDUSD Weekly Chart 12/05/16

AUDUSD Weekly Chart 12/05/16

AUDUSD is trading near its weekly support that may also develop into reversed Head-And-Shoulders (H&S). The entry requires a weekly close although as it is the last trading day of the week tomorrow (Friday) it may be capitalized over in today’s session. Our concern with AUDUSD is the fact we are already exposed to USD in our current trades. A third trade in one of USD pairs and crosses will leave us vulnerable to the US Dollar, which we are unwilling to accept.

Despite the positive interest that is gained in EURAUD it is a more volatile pair and although the odds for an additional 1.5600 re-test were reduced it cannot be ruled out. With that said, the aside the technical entry that is available it will also balance our exposure to EUR where our full weight will be titled to GBP.

EURAUD Trade Alert Details

Please click on the chart to enlarge:

EURAUD Daily Chart II 12/05/16

EURAUD Daily Chart II 12/05/16

EURAUD short at market price (1.5535)
Take profit: 1.5155
Protective stop: 1.5703
Risk Ratio (RR): 1 : 2.3 (approx.)
Estimated duration: 14 days

17/05/16 UPDATE: EURAUD is trading at 1.5387 at the time of this writing.

Please click on the chart to enlarge:

EURAUD Daily Chart 17/05/16

EURAUD Daily Chart 17/05/16

we are closing 30% of the short trade at market price and shift the protective stop to the entry.

18/05/16 UPDATE: We are aware EURAUD is trading near our entry at the time of this writing. We sincerely hope we will remain in the trade as we still believe AUD is due for moderate gains. If we are stopped out at the entry we are unlikely to re-enter EURAUD.

18/05/16 UPDATE II: EURAUD triggered the protective stop at the entry, ending the trade with a profit.

FX Trading Strategy: Reverting to the Australian Dollar

As EURAUD trade is  closed this page can now be accessed by all traders. Open trades and relevant intraday strategies are restricted to members only. We have been providing trade alerts in the Forex market since May 2014.
FX Trading Strategy: Reverting to the Australian Dollar

MEMBERSHIP PLANS INTRADAY STRATEGIES OUR TRADE ALERTS
FX Trading Strategy: Reverting to the Australian Dollar

performance4 edit1

FX Trading Strategy: Reverting to the Australian Dollar

Last Updated on May 22, 2016