FX:AUDUSD Australian Dollar/U.S. Dollar
AUDUSD was sent heading south after the release of China’s trade balance figures yesterday. Given that the Aussie is generally considered the weaker of the two , I suspect that the above turn north is just a temporary pullback and possibly a good level to enter a short position for the next leg down.
Trade closed: stop reached: Price only dropped to about 0.7213, a mere 20 pips, providing scant opportunity to profit and, on a 60-minute chart, falling within the pattern of a full-fledged reversal as opposed to a temporary pullback. Given that I trade based on 24-hour market cycles, I had to refer to my own proprietary charts to analyze why this happened, and in doing so, it immediately became clear that AUDUSD had, in one day, totally reversed from the top of its cycle to the bottom, tanking in a single day to cover the same amount of distance it took two or three days to climb. It was therefore out of position structurally to continue downward and still is.