The Weekly Update: The Turn of the Aussie

AUD Signal Strategy

The Euro rose on Friday due to economic data from the euro zone as well as profit taking over the selling that was triggered by the European Central Bank (ECB). We are expecting the Euro to continue its uptrend throughout the upcoming week.

To recap, we have missed the long entry in EURCAD and dismissed NZDJPY, which already posted some gains in the market. As a result we cannot opt for either entry. GBPNZD triggered the protective stop by several pips before correcting lower. The short entry remains valid but we do not re-enter trades that were stopped out unless a new entry has formed.

GBPAUD is one of the crosses we were waiting for the weekly close. Due to the selling on Friday it means we may require to absorb a drawdown of over +200 pips should we consider attempting a short trade in the cross. Although GBPNZD entry is valid we should say that there may be a long entry in EURNZD. Due to the potential conflict we will not opt for EURNZD.

We did not have a firm entry in AUDUSD but based on the crosses it may continue trading higher in tandem with the Euro, perhaps firmer as there may be a short entry in EURAUD.

GBPAUD Weekly Chart

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The Weekly Update: The Turn of the Aussie

GBPAUD Weekly Chart 24/06/18

The risk in GBPAUD is the price re-testing 1.7985. It can be within 24 hours or several days. Regardless of the outcome it would be a reckless decision to absorb such a drawdown if the trade is initiated at current levels after some selling already materialized.

Even if the price does re-test 1.7985 we will have to wait for the weekly close unless we anticipate the weakness to take place in less than 24 hours. Although AUD may correct higher we will require a weak GBP to prevent such a drawdown.

We are aware the potential target is fairly decent, however, this would be a late entry, the odds for a drawdown are extremely high.

There may be a short entry in EURAUD, however, we will not short EUR if we are holding a long EUR position.

AUDCHF Daily Chart

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The Weekly Update: The Turn of the Aussie

AUDCHF Daily Chart 24/06/18

As the gains already took place it would be a late entry. We are exposed to an immediate drawdown of approximately +50 pips. The difference between GBPAUD and AUDCHF is the size of the drawdown and that the overall loss is smaller. We can easily tolerate losses that are less than 200 pips.

AUDCHF may not be the optimal cross to opt for if we are holding a long position in EURUSD. Rather than a firm AUD a weak CHF may lead to stronger gains in the cross. We are also noting an entry developing in CADCHF but the price will need to continue trading lower, hence the potential drawdown in AUDCHF.

AUDJPY 4hr Chart

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The Weekly Update: The Turn of the Aussie

AUDJPY 4hr Chart 24/06/18

There has been a breakout in AUDJPY on Friday. This is a 4hr entry as opposed to AUDCHF and it is a late entry. Opting for AUDJPY greatly depends how low will the gap be. At the time of this writing AUDJPY is positioned to gap lower.

If we opt for both AUDCHF and AUDJPY in our signals it will increase our exposure to the Australian Dollar but these are fairly tight stops that can be absorbed if triggered.

To summarize, these are all late entries. There are indications for a weaker Japanese yen (JPY) but we need the yen to continue weakening. CADJPY is one of the potential candidates for a weaker JPY.

AUDJPY Trade Alert

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The Weekly Update: The Turn of the Aussie

AUDJPY 4hr Chart II 24/06/18

AUDJPY long at market price (ask 81.86)
Take profit: 83.20
Protective stop: 81.10
Risk Ratio (RR): 1: 2.0 (approx.)
Estimated duration: 5 days

Relevant as long as AUDJPY is below 81.95

Note: This is a 4hr entry. The potential drawdown is a re-test of 81.50. This is a late entry but we can easily absorb the loss should the price reverse lower.

AUDCHF Trade Alert

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The Weekly Update: The Turn of the Aussie

AUDCHF Daily Chart II 24/06/18

AUDCHF long at market price (ask 0.7360)
Take profit: 0.7490
Protective stop: 0.7277
Risk Ratio (RR): 1: 1.6 (approx.)
Estimated duration: 14 days

Relevant as long as AUDCHF is below 0.7375

Note: This is also a late entry, the risk for some drawdown is higher but it can be abosrbed. The potential drawdown is a re-test of 0.7305. It is a poor risk ratio due to the late entry but we are still opting for the entry.

25/06/18 UPDATE: The dip in AUDJPY was too close to the protective stop. We decided to modify the trade based on the daily chart, which will increase the estimated duration to 14 days

We are shifting AUDJPY take profit order to 83.70

We are shifting AUDJPY protective stop beneath Friday’s low to 80.74.

27/06/18 UPDATE: AUDJPY recent bearish spike is related to remarks that were made by BOC Poloz. The reaction in CADJPY spilled over to AUDJPY.

The sharp move lower was fairly close to the protective stop before correcting higher. We cannot continuously widen the stop. AUDJPY is held in a range since the beginning of the week and it is currently trading at the lower side of the range. We shifting the protective stop beneath 19 June low’s to 80.58.

02/07/18 UPDATE: We do not have a sufficient distance from the market in AUDCHF to withstand the spread widening including the RBA monetary policy. We are shifting the protective stop to 0.7254, the protective stop will not be shifted again unless it is to avoid the spread widening.

GBPAUD  Trade Alert

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The Weekly Update: The Turn of the Aussie

GBPAUD 4hr Chart 02/07/18

GBPAUD short at market price (bid 1.7854)
Take profit: 1.7570
Protective stop: 1.7987
Risk Ratio (RR): 1: 2.2 (approx.)
Estimated duration: 7 days

Relevant as long as GBPAUD is above 1.7830

Note: The potential drawdown is a re-test of 1.7905. In light of the recent developments it is a struggle to assume the RBA monetary policy may have a bullish impact on AUD, however, we are relying on the technical end of the market.

Should the weakness begin and the price stalls around 1.7730 or 1.7650 we may exit the trade. GBPAUD increases our exposure to AUD. This is a 4hr entry.

04/07/18 UPDATE: We shifted GBPAUD protective stop to 1.8000 as the gains in today’s session can force a re-test of 1.1985.

09/07/18 UPDATE: We are tightening the protective stops for AUDJPY and AUDCHF. Due to the range no significant progress has been made, we see little reason providing more room for these trades to correct lower.

We are shifting AUDJPY protective stop to 81.35. We are shifting AUDCHF protective stop to 0.7310

Regarding GBPAUD, We expected a larger gap in the cross. The UK switched to a month on month GDP, the first monthly GDP figures are expected to be released on Tuesday. The market reaction may be exaggerated, the spreads may widen significantly. We are shifting GBPAUD protective stop to 1.8005.

09/07/18 UPDATE II: GBP was sold in today’s session in reaction to Boris Johnson’s resignation. We would like to highlight that despite a firm AUD minor weakness was noted in GBPAUD until the resignation.

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GBPAUD FX Signal 09/07/18

GBPAUD 4hr Chart 09/07/18

The position we are in at the moment is whether we would like to roll the position into the UK GDP tomorrow. We initially did not target GBP but AUD.

As we are already exposed to AUD we decided to close GBPAUD short trade at market price (1.7700).

09/07/18 UPDATE II: Based on our recent analysis we decided to close AUDJPY long trade at market price (82.71).

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AUDJPY FX Signal 09/07/18

AUDJPY 4hr Chart 09/07/18

We are also closing 20% of AUDCHF long trade at market price (0.7400).

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AUDCHF FX Signal 09/07/18

AUDCHF Daily Chart 09/07/18

10/07/18 UPDATE: It appears there are speculations the US is planning new USD 200 billion tariffs on China, which triggered the risk aversion in the markets. If it will be officially denied JPY may weaken, hence the potential drawdown. If the tariffs will be officially confirmed we may witness stronger safe-haven flows into JPY.

We see no reason in clinging onto AUDCHF as CHF may also benefit from safe-haven flows should the trade war concerns increase. Although it is a minor profit (excluding the swap) we are closing AUDCHF long trade at market price (0.7378).

EURJPY Trade Alert

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The Weekly Update: The Turn of the Aussie

EURJPY Weekly Chart 10/07/18

EURJPY short at market price (bid 130.28)
Take profit: 125.05
Protective stop: 132.80
Risk Ratio (RR): 1: 2.0 (approx.)
Estimated duration: 28 days

Relevant as long as EURJPY is above 129.80

Note: We are willing to absorb some drawdown as the short trade is initiated following some selling in the pair. We are very displeased this is the scenario but as it is a weekly entry we are opting for the trade. The potential drawdown is a re-test of 131.87, which the typical potential drawdown for weekly entries.

EURAUD Trade Alert

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The Weekly Update: The Turn of the Aussie

EURAUD Weekly Chart 11/07/18

EURAUD short at market price (bid 1.5831)
Take profit: 1.5450
Protective stop: 1.6005
Risk Ratio (RR): 1: 2.0 (approx.)
Estimated duration: 28 days

Relevant as long as EURAUD is above 1.5770

Note: The potential drawdown is a re-test of 1.5890. Should the ECB minutes fail to trigger any volatility in EURAUD economic data that is due next week may be sufficient to trigger some volatility in the cross as opposed to what we recently experienced in GBPAUD.

12/07/18 UPDATE: EURAUD is trading at 1.5763 (ask) at the time of this writing, we are closing 10% of the short trade at market price.

13/07/18 UPDATE: Despite EURAUD weakness the price is still held in a range since the end of June 2018. The price tested the lower-end of the range before correcting higher.

Although the weekly entry is not negated it may suggest the weekly high may be re-tested before a resumption of the downtrend. We are not keen on absorbing such a retracement (should it indeed materialize) as EURAUD is not the only cross that is held in a range at the time of this writing.

EURJPY differs to EURAUD as the weakness has yet to begin. Should EURJPY correct lower and begin stuttering we will consider reducing our exposure in the currency pair. EURJPY may still re-test 131,87 (the potential drawdown) before correcting lower.

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The Weekly Update: The Turn of the Aussie

EURAUD Weekly Chart 13/07/18

EURAUD is trading at 1.5759 (ask) at the time of this writing, we are closing the short trade at market price.

CADCHF Entry Order

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The Weekly Update: The Turn of the Aussie

CADCHF Daily Chart 19/07/18

CADCHF long at 0.7470 (buy limit order)
Take profit: 0.7620
Protective stop: 0.7413
Risk Ratio (RR): 1: 2.6 (approx.)
Estimated duration: 14 days

Note: We are expecting the Canadian economic data to trigger the buy limit order. In an event the market triggers the entry prior to the data we may be forced to widen the protective stop depending on the distance we have from the market prior to the data as the spread will widen.

In an event CADCHF corrects lower and misses the entry we may decide to initiate the trade at market price. We must also highlight that should the price trigger the entry order and remain near the entry prior to the weekly close we may temporarily widen the stop as the spread will widen on Sunday.

If the entry is not triggered within the next 24 hours we may cancel the order. In this entry we are fairly reluctant to absorb any drawdown as we often do in other entries.

The buy limit order was cancelled as CAD spiked higher following the CPI figures.

GBPUSD Trade Alert

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The Weekly Update: The Turn of the Aussie

GBPUSD 4hr Chart 23/07/18

GBPUSD long at market price (ask 1.3105)
Take profit: 1.3260
Protective stop: 1.3029
Risk Ratio (RR): 1: 2.0 (approx.)
Estimated duration: 7 days

Relevant as long as GBPUSD is below 1.3125

Note: We are taking a fairly high risk in GBPUSD. The potential drawdown is a re-test of 1.3050 although 1.3080 may also hold. The risk is in the entry itself as it is far from being a conservative entry. If timed correctly the corrective gains may begin within the next 24 hours. This is a 4hr entry.

24/07/18 UPDATE: GBPUSD is trading at 1.3114 at the time of this writing, we are closing 20% of the long trade at market price and shift the protective stop to 1.3090. This is a 4hr entry and it is handled in accordance.

24/07/18 UPDATE II: We expected EURJPY to begin correcting lower but we are noting the price is stuttering near a support level. We are unlikely to have any indication regarding the possible ECB monetary policy impact on the Euro until Wednesday.

As this is a weekly entry we are not meaning to be paying attention to shorter time frames, however, due to the price range many currency pairs and crosses are locked in we would rather avoid remaining in the trade and absorbing retracements. It is a tough decision but due to the range we decided to exit EURJPY at market price (130.07).

GBPJPY Trade Alert

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The Weekly Update: The Turn of the Aussie

GBPJPY 4hr Chart 25/07/18

GBPJPY long at market price (ask 145.95)
Take profit: 147.40
Protective stop: 145.18
Risk Ratio (RR): 1: 2.0 (approx.)
Estimated duration: 7 days

Relevant as long as GBPJPY is below 146.18

Note: This is a 4hr entry. Similar to GBPUSD it is not a conservative entry but based on the progress of GBPUSD it may accommodating the current market conditions. In an event no progress is made and we are too close to the market prior to the weekly close we may temporarily widen the protective stop.

The potential drawdown is a re-test of 145.45.

24/07/18 UPDATE: GBPUSD is trading at 1.3114 at the time of this writing, we are closing 20% of the long trade at market price and shift the protective stop to 1.3090. This is a 4hr entry and it is handled in accordance.

25/07/18 UPDATE: The 4hr close is on the verge of being sufficient, a higher 4hr close would have been a firmer indication further gains are due without bearish retracements. Should GBPUSD correct lower there is a fair possibility it may trigger the protective stop.

Very similar to our past trade in EURJPY, if many pairs were not held in a range we would have allowed the trade to float in the market. As there is a struggle near the resistance we prefer to exit the market.

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The Weekly Update: The Turn of the Aussie

GBPUSD 4hr Chart 25/07/18

GBPUSD is trading at at 1.3162 at the time of this writing, we are closing the long trade at market price.

25/07/18 UPDATE II: We will be very transparent. GBPJPY neckline was re-tested and capped the gains at the time of this writing. It will either attempt breaking higher following the 4hr close or we will witness a sharp reversal.

We cannot predict whether a resistance level will break or hold without a fundamental trigger in a scheduled time frame. GBPCHF may have provided a long entry, however, we do not issue trade during the Asian session. Should the entry remain valid we will consider it during the European / US session.

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The Weekly Update: The Turn of the Aussie

GBPJPY 4hr Chart II 25/07/18

It does appear GBP gains may continue at the time of this writing but we must have a technical confirmation in pair or cross we selected. This is another tough decision but we decided close GBPJPY long trade at market price (146.38).


AS THE OBJECTIVE OF THE STRATEGIES HAS BEEN MET THE FX SIGNAL IS NOW ACCESSIBLE TO ALL TRADERS


The Weekly Update: The Turn of the Aussie

The Weekly Update: The Turn of the Aussie