AUD/USD is moving sideways on the 1-hour time frame, but it’s right at the 1.0650 minor psychological resistance now. It looks like a reversal candle is forming right on that level and stochastic is overbought. Do you think it’d be a good idea to short just for a day trade?
Here’s the setup I’m looking at:
I heard PBoC just hiked their RRR (again!) and, based on previous price action, this has been negative for the Aussie. What’s your take on this pair?
For what it is worth, personally I would not go Short this pair just yet. The Monthly Pivot comes through the chart at around 1.0704. On the Daily chart, this pair has been ranging, recently, between that sort of level and around 1.0520. On the Daily, we are in an overall uptrend, and Price is low testing off the 50ema. So while I absolutely see where you are coming from with your analysis, for me there are other, higher-probability setups out there right now. The chances of Price retracing up to around the 1.0704 level is too great for me to want to go Short from the current level.
Sorry to be negative, and hope that this is okay - first-time poster on this thread, not sure I am supposed to be presuming to advise one of the FX-Men lol!!
That’s totally cool SimonTemplar! Don’t sweat it! I posted this here because I really wanted to get some feedback from other traders. You see, my trading has been on a slump lately and I could really use your help.
Thanks for the insights. I see that bigger range on the daily time frame now, and it looks like price broke above that resistance I pointed out. What other higher-probability setups are you seeing out there? Care to share?
noob here; but i think 1.0730 could trigger a drop to, depending on how quickly price reaches this level, 1.0675. the highest probability trade is probably at 1.0850, down the yellow brick road to, 1.0675. good for almost 175 pips.
Yes, AUD/USD seems to have respected the Resistance zone on the Daily and could be turning around, peeped above the Monthly Pivot and stalled around 1.0719, so could be looking at some downside now, but there are recent highs above the current level so I would still have mixed emotions about it.
I find that the sort of range-bound approach out of horzontal Resistance that you suggested for the AUD/USD setup does work better, for me at least, when that range is taken from the Daily chart. A good example of this is the middle of February this year - I had 5% trades Short on CAD/CHF, GBP/CHF and USD/CHF around that time, applying exactly what you spotted on this occasion for AUD/USD but on the Daily chart. It really doesn’t take many setups like that to make a good return - I was on around 15% for February just on those three trades. Once one has the confidence to know that setups like that will come along, it is easier to sit tight and resist taking any setup that seems to have any counter-argument.
Recent trades I have taken - I shorted EUR/CAD out of the strong Resistance level at around 1.4340, I was Long on AUD/NZD from the Support at around 1.2815, and I was Short a couple of days ago on SGD/USD, out of some Support become Resistance that high-tested out of the Monthly Pivot. I had Fib support for each of those trades, and now have good pips locked in, have closed SGD/USD for around 1.5% profit I think.
I generally don’t like tipping specific setups ahead of time - I am strongly in favour of doing one’s own research, not as a selfish thing, but rather as it is important for my psychology to find my own setups and know why I am in a given trade and, importantly, that I could replicate that same trade later. But what am I looking at now? If USD/CHF retraces up to around the 0.8555 level then I would look at shorting it, there are quite a few factors coming together, there. Am being cautious, though, as Price might want to retrace higher to continue the downward channel/intersect with a more powerful ema, perhaps the 50, which is has previously respected. CAD/CHF is currently retracing, will look for a similar setup there. 0.8920 is looking like Support become Resistance, Monthly Pivot, Fib, 50ema all coming together within a downtrend, so I am eying a Short there once the current retracement plays out. CHF/JPY has also been trending nicely, recently, so has given some nice intraday opportunities.
So that is a couple that I am looking at. I find that cross pairs work very well on the Daily, they give good, concerted moves when they do go. I like intraday trades on the Majors, as the moves are quite concerted and one can find ‘clean’ spaces between the big news announcements.
I am not surprised that you are finding something of a slump at the moment - the market is in a bit of a state of flux, the Eurozone is very uncertain, many currency pairs have hit all-time/recent year highs or lows, and that always introduces a bit of uncertainty to the market. I am finding intraday setups harder to come by - EUR/USD and Cable have both been a bit of an unpredictable mess, recently, compared with easier times, and that obviously communicates to much of the rest of the market. USD/JPY has not been giving much compared with recent months, either - imho it was nice and clean to trade prior to the March earthquake, but has still not quite decided what it is doing since. I am not saying that there are no good opportunities on the Majors, there absolutely are, I have made some decent intraday pips on the EUR Hourly chart recently, but the picture is not as clear as it could be.
Anyway, apologies, I am both rambling on and beginning to sound like a Forex preacher, when noone knows the answer, really, we just grab the successes where we can and try to limit the losses.
I hope that you have found some of the above of interest, at least, and don’t find it condescending at all, that is absolutely not my intention.
As you will know, slumps happen, it will just be a blip. The market always gives setups, they are just sometimes rarer than others. I think that we are in a bit of a thing period currently. For me, the picture also gets clearer through the month - I make better pips in the second half than the first, as a rule.
Anyway, apologies for the extreme length of this post!
No worries, SimonTemplar! I didn’t find it condescending at all! In fact, I enjoyed reading your post thoroughly, hoping to find some clues that can help me with my trading. You’re right, it seems that the markets have been very fickle lately and sentiment just keeps changing. It’s sometimes tough to identify which particular factors are driving the comdolls and even the major pairs. Thanks for the comforting words, too! I do hope my trading performance picks up during the second half of this month.
Hey samk090905! I’ve been eyeing that 1.0730-1.0750 area, too. It looks like resistance on the 4-hour time frame. I’m not so sure about 1.0850 though, because AUD/USD could keep going all the way to 1.1000 if it breaks past 1.0750. Just my humble opinion.
But if I were to short this pair, I’d probably set my sell order around 1.0730 like you said then aim for the support around 1.0550.
Anyway, let’s see how it pans out. We never know what the markets are up to, and we just might see that 175-pip drop that you predicted. I’d like to be on that “yellow brick road” that’s for sure! Haha.
Good input…I am taking some range and retracement trades here on the AUDUSD but am also expecting a drop in Gold in the next couple of weeks. To that point, this pair may have time to cycle one more time up to 1.07 range. I am on board for that channel up currently…I seem to be drawn to bullish aud/usd like happy is to chocolate. Something about the carry trade just keeps me coming back.
Trades in place, I’m off to grab my stash of chocolate morsels from my office freezer.
LOL, you noticed?! I guess I really am THAT hooked to long AUD/USD trades. Aside from the carry trade, I think it’s also the strength of the Australian economy in comparison to the U.S. But looking back on my long setups, I realized I should’ve been more flexible and should take risk sentiment into consideration.
1.0500 seems to be holding on AUD/USD, plus a somewhat bullish divergence on the 4-hour chart. Then again, I don’t know whether risk appetite is up. You could be right in saying that gold prices could drop in the near term.
Anyway, good luck on your trades and enjoy those chocolates! Don’t forget to share!
Sorry, too late for anyone to do anything with this, but I made some pips on AUD/USD earlier this week and thought you would want to see the trade, in light of our discussion last week.
We have been in a sustained uptrend on the Daily chart, which while currently stalled has not reversed. So my bias was for Long entries. We discussed last week the range on this pair, well this week the Hourly chart has shown a clear upper level of around 1.0615, with a rising trendline below that, giving us an ascending triangle.
All timeframes have recently been showing a lower Support level of around 1.0500. So with my Long bias from the Daily, and the ascending triangle on the Hourly, I looked for Long entries off the Hourly chart.
Monday morning (GMT) opened with a low test into the 1.0500 area on the Hourly chart, the 0900-1000 bar. I don’t like trading first thing on a Monday morning, so I did not take this, preferring to give the market a couple of hours to sort itself out (Price had made a lower low on the Friday before, so Monday could have seen this Support line break). The 1200-1300 Hourly bar gave us a second low test into this same Support zone. This is the trade I took.
My Entry was the break of the high of that bar, so the Entry was 1.0533, my Stop was below the low of the earlier low test (for only a few extra pips this is a lot safer), so at 1.0488, giving me a risk of 45 pips. I set my TP at 1.0600, just inside the established Resistance zone at the top of the ascending triangle (and five pips lower than the Weekly Pivot, which comes through at 1.0605). This gave me a 67 pip TP, for a 1.5:1 R:R. I risked 1% on the trade, so stood to make 1.5% if it went in my favour.
I could have been bolder with the trade, by taking the entry off the first low test (which would have worked out), or by setting my Stop below the low of the Entry bar (which also would have worked out), but given that this was Monday morning, and that the setup still gave me a good R:R, I was happy with how I played it.
It hit TP overnight Monday, so I started the week 1.5% up. I realize that this is in the past, so hope it does not just smack of showing off, but as you invited people to list their trades here, and given that we have just been discussing this pair, I thought that you might be interested in the trade. This was a very high probability setup, I’d take it every time I saw it.
I have been looking at the daily chart for this pair and have noticed a nice descending triangle forming with lower highs and some real test of support over the last few days. The stoch is around 25 and going lower.
I haven’t looked to the week ahead but it seems like fundamentaly we’re headed into a risk off environment. My leaning is to a breakout through support. Noticing support, it has a LONG way to go, I think around 1.0250 for anything with any real strength.
I haven’t been doing this very long, so please tell me what I’m not seeing!
You’re right, that’s a descending triangle on AUD/USD’s daily chart. I tried to short on the “break” a couple of times but I got faked out
It seems that, with the risk off environment that you mentioned, we might just see a break to the downside soon enough. But I’d probably wait for a really big catalyst for that to happen. For now, it looks like traders are uneasy about buying risky currencies, but at the same time AUD is still fundamentally stronger than USD. That’s probably why the 1.0450-1.0500 support refuses to give way.
But if you’re waiting for a breakdown, where do you plan to set your sell stop orders? I just might jump in with ya!
I have been watching this, too, and for me the wicks (I use a candlestick chart for my Daily) are a little long to make the triangle that clean, so I would want to use Price Action to support my Entry to any Short.
happypip, presumably you tried entries on a couple of the recent low tests, say 25th May, 16th June or yesterday? For me, with everything else that is going on, and with the long wicks making Stop placement tricky, I would probably be inclined to play this one more cautiously - I would wait for a close below the Support level around 1.0500, then maybe even look for it to be retested with a high test bar. If we get that, I would happily enter off that bar. If it high tests then falls, then the Entry will be as efficient as playing it on the initial break (as it would enable a tighter Stop), and if it does not high test but just falls away, well, there are plenty more fish in the sea.
Risking 1% per Entry, I prefer to wait for confirmation of breaks from consolidation where the picture is slightly unclear, rather than just take them live, as it protects against fakeouts, the cost of which mounts up. I will enter live for a cleaner triangle, but this one is a bit of a mess, imho, so would rather wait for confirmation.
As Snook pointed out, there is potentially a long way for this pair to drop, so I think that there is room for a more conservative Entry.
Anyway, sorry to ramble on, just thought a different view might be interesting.
I agree ST. I think the Aussie currency is fundamentally better off. So my other scenario is that it breaks to the upside because now all the sellers are exhausted. The stoch is close enough to the bottom to rally upwards. If thats the case then the highs towards the top of the triangle will probably hold. And the more I think about that, the more I think it to be the likely scenario.
If however it does break downwards, I think you are much more accurare than I, in that anyone should wait for a close well below all those support wicks before a short order.
Hi guys! I noticed you were looking at the Aussie too so I decided to pitch in too!
I’ve been looking at this pair for a couple of days and I’m quite impatiently waiting for it to break as it has been ranging for quite some time now. I’m looking at it from a chaos trader’s point of view.
As you can see the alligator has been in a range for a long time and this often anticipates a large move. I’ve been waiting for a fractal to be broken (blue horizontal line). I call the bar that broke the line the “confirmation bar”. My entry will be the low of this confirmation bar at 1.0452 (green horizontal line). For the profit taking I’ve been lookin’ for relevant support and the 1.0200 psychological handle is a good candidate also because it has been a relevant support in the past. I will add to my position along the way when my indicators tell me to. If it turns out fine this will be an amazing trade, if it finally decides to move of course… I’ve seen snails that move faster than this pair lol! Have a good one guys!
As I type, it is 10pm EST 6/26. AUD fell to 1.0420 and is now bouncing up to 1.0450. I’m going to see how high this bounces over the next few hours and place a sell if it hits a nice Fib level (maybe 50%) from the 6/22 high. The fundamental calander has nothing for the AUD this week, so whatever USD news we get looks to move this pair all week long. Happy pip hunting to you guys and may the odds be with you.
Yep, you’re right, I did get faked out with this pair sometime during the last week of May. The support zone seems to be much wider on this one (1.0450-1.0500) but it looks like its broken now. But I’ve learned my lesson with shorting on breaks so I’ll just wait for it to show signs of retracing.
I’m with ya and snook on taking a more conservative setup for this one, if it does show up!
Wow, it’s certainly nice to see a chaos trader’s opinion on this thread! Welcome to my humble corner, Martinus!
It looks like AUD/USD (the alligator?) already broke below those levels you drew. Were you able to get in on a short trade? I’m eyeing the 1.0200 area too for my target but I still haven’t decided where to set my stop. Where did you place yours?