Trade Idea: 2012-11-28 00:01
After FOUR weeks of not getting triggered, I’ve had enough of this nonsense! Luckily for me, this setup on EUR/AUD lines up nicely like a Steve Novak three-pointer! Ain’t it a beauty?!
After retracing last week, EUR/AUD has been finding tough resistance at the 38.2% Fib. Just take a look at all those dojis that formed! Furthermore, Stochastic just crossed over in overbought territory, indicating that we may soon see a period of selling!
On the fundamental side of things, I think we’re seeing risk aversion creep back into the markets, as the Greek debt deal didn’t exactly spark any real optimism. There’s still a whole lot of details that need to be ironed out, and government officials still have to approve of the austerity measures. Couple this with the lack of any progress with regards to the U.S. fiscal cliff, and I think higher-yielding currencies could be in for some pain over the next week.
The key of course, is picking which non-safe haven to go with. At this point, I’d rather put my money on the Australian dollar (which has remained afloat throughout the past few months) than the euro (which has been trading to the whims of the market).
Sold EUR/AUD at 1.2373, stop loss at 1.2473, profit target at 1.2200.
Anyway, I jumped in at market at 1.2473 and am going with a 100-pip stop. I think this should give my trade enough breathing room to withstand volatility. I’m ultimately targeting 1.2200, which is just below the recent swing low. As usual, I’ll be risking 0.50% of my account on this trade.
If you guys have any comments and suggestions on how I can manage this trade, feel free to hit me up below!