[B]My picks:[/B] Pending EURAUD Short
[B]Expertise:[/B] Combining Money Management with Fundamental and Technical Analysis
[B]Average Time Frame of Trades:[/B] 3 days - 1 week
The most prominent trend in the past week (and perhaps the past two months) has continued this morning. Risk appetite has generated impressive trends with many serious technical breaks already behind us. My contrarian view of general market health has led me to fight this current in a number of my positions. However, at this point, my bias is leading me to attempting to pinpoint tops and bottoms; which reduces my chances for a successful trade. On the other hand, I don’t want to abondon my view of the fundamentals. To reconcile this, I will follow risk appetite, fundamentals and look for a technical catalyst. All of this can be found in AUDCHF and EURAUD. I will choose the former as it involves less risk in the general trade setup.
From a technical perspective, there has been a steady advance in swing lows since March that has recently been held back by a triple top (currently in the making) around 0.8635/65. Should risk appetite be sustained, this pair can be thrust into the next leg of the trend. However, if general sentiment falter, we still have fundamental fuel behind a series of heavy-lifting economic data and events. The RBA rate decision and Swiss 1Q GDP reading are due early tomorrow morning. Then, later on, the Australian statistics board will release its own growth figures. This is critical to factor in. My strategy will look for a daily close above 0.8650, whereby I will enter a small long position with a stop down at 0.8535 and a target equal to risk. I will build to a full position if there is a pull back to within 75 points of the rising trendline going back to March 19th (now just at 0.85). The stop on this second half would be 0.8415 and its target will be looking for a true breakout to 0.8950.