Hello Traders, I really like shorting the AUDUSD before the US CPI release, and here is why: *The Fundamentals: - GDP Growth: (AUD 0.5% / USD: 2.7%) is higher in the US. - Inflation: (AUD: 7.8% / USD: 6.4%) is hotter in Australia than the US. - Unemployment: (AUD: 3.7% / NZD: 3.6%) - Interest Rates: (AUD: 3.60% / NZD: 4.75%) is higher in the US which is good for the USD. The Fundamentals numbers are in the favor of the USD.
*Sentiment: -COT Report: shows /64.9%/ of the institutional Future open contracts are long on the USD, while /37.8%/ are long on the AUD. This favors the USD over the AUD. - Retail Sentiment: 70% of retail traders are short, which is another good factor, because most of the time the crowd are on the wrong side of the move.
Technical: The Price is in a good and healthy downtrend with lower lows and lower highs, made a retracement to the /0.618/ fib zone which shows a good resistance. This gives a good risk to reward ratio.
Although the DXY shows some weakness after the NFP last week with /3.6%/ unemployment rate, the AUD didn't show much strength against the dollar compared to the GBP, EUR or the NZD. So If the CPI numbers today come in the favor of the dollar, AUD will show a big drawdown.
Trade Safe !
Trade closed: stop reached
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The stop loss reached but I see it another short opportunity from a better entry.
Comment
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The price reached the stop loss, but I see it another short opportunity.
@Alisha_Sheppard, I got stopped out . Got back in for another sell
Adam_hazouri
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@Alisha_Sheppard, My initial stop loss was tight cause I was expecting a spike on the CPI data release yesterday, it didn't happen. Now the Risk Off is so clear in the market which means Long USD, Long JPY and shorting /Risk On/ currencies like AUD, NZD, GBP. Trade Safe!
@Tranx, It was as the forecast for the m/m and y/y with a slight raise in the Core CPI. These numbers didn't moved the market substantially , maybe cause most of the investors were expecting higher inflation numbers. At the same time they weren't lower than forecast that makes the FED shifts his policy of tightening and raising the rates to lower the inflation.