Currently looking at AUDUSD on long entries and awaiting price to hit out strike zones.this is a trade I will be holding for a while due to my life style, type of trading strategy and current view on the markets. I hope you enjoy the read and hopefully this analysis plays out.
FUNDAMENTAL VIEW:
-with strong upbeat numbers on the NFP on Friday we saw some retracement due to the dollar gaining some strength on numbers which is currently giving a slight fall on all X/USD pairs and other correlated assets to the DXY.
The Australian Dollar is highly correlated to copper and we have seen a sharp decline of that metal since the beginning of last year which has also affected most AUD related pairs. All this came to light due to the Chinese projecting a slow down on their economy growth and have projected some forecast on slow purchase on global commodities.
This year however things are still showing a slow downgrade which is affecting the AUD which heavily relies on the Chinese economy for majority of their imports/exports as well as foreign investments.
However also looking at the DXY which is showing some steady decline over the coming weeks we see the Chinese economy using that as a catalyst to exchange more dollars for copper and gold which in effect gives the aud more strength. In regards to trade tariffs though the US-Chana have said there is no pen on paper yet they have how ever managed to make good progress in negotiations which will give more Chinese companies the edge to purchase more commodities and other investments through the aud dollar since the most Chinese firms working through the Australian-us corridor rely heavily on trade deals . these are some of the minor reasons which we see why the AUD will gain a bullish sentiment over the coming weeks through to Q1-Q2.
TECHNICAL VIEW:
Looking at the AUDUSD weekly chart we have seen that price has attempted on several occasions to break the 0.70000 handle demand zone since 2015 September. Even with the recent price spike on the 2nd of January this year price has still failed to break. This is one reason we have realised that the demand zone is a very strong level were institutional money is placed on long but we originally got stopped out due to the spike.
We have also notice that price is currently creating a fib sequence with the 23% traction almost completed and we see price rallying to through to the 38% to 50% and finally to the 61.8% were we have some historic level of supply around the 0.77100 handle. all this put together is out reason for going long and we believe that over the next couple of weeks our fundamental view will act as a catalyst for our technical view to playout in a slow and steady manner.
RISK EXPOSURE:5
We will be going in with a 3% exposure on this approach which will be divided into 1.5% each on separate entries got a good dollar cost average due to out view that this lines up well with our fundamental and technical top down analysis.
Excited to see what the next few weeks will present us with this pair.
as we say we plan the trade and trade the plan. we stick to out rules regardless of the outcome wither win or loose as risk management is key in every position we take in the markets.
have a lovely trading week guys. God bless :) and trade safe out there
FUNDAMENTAL VIEW:
-with strong upbeat numbers on the NFP on Friday we saw some retracement due to the dollar gaining some strength on numbers which is currently giving a slight fall on all X/USD pairs and other correlated assets to the DXY.
The Australian Dollar is highly correlated to copper and we have seen a sharp decline of that metal since the beginning of last year which has also affected most AUD related pairs. All this came to light due to the Chinese projecting a slow down on their economy growth and have projected some forecast on slow purchase on global commodities.
This year however things are still showing a slow downgrade which is affecting the AUD which heavily relies on the Chinese economy for majority of their imports/exports as well as foreign investments.
However also looking at the DXY which is showing some steady decline over the coming weeks we see the Chinese economy using that as a catalyst to exchange more dollars for copper and gold which in effect gives the aud more strength. In regards to trade tariffs though the US-Chana have said there is no pen on paper yet they have how ever managed to make good progress in negotiations which will give more Chinese companies the edge to purchase more commodities and other investments through the aud dollar since the most Chinese firms working through the Australian-us corridor rely heavily on trade deals . these are some of the minor reasons which we see why the AUD will gain a bullish sentiment over the coming weeks through to Q1-Q2.
TECHNICAL VIEW:
Looking at the AUDUSD weekly chart we have seen that price has attempted on several occasions to break the 0.70000 handle demand zone since 2015 September. Even with the recent price spike on the 2nd of January this year price has still failed to break. This is one reason we have realised that the demand zone is a very strong level were institutional money is placed on long but we originally got stopped out due to the spike.
We have also notice that price is currently creating a fib sequence with the 23% traction almost completed and we see price rallying to through to the 38% to 50% and finally to the 61.8% were we have some historic level of supply around the 0.77100 handle. all this put together is out reason for going long and we believe that over the next couple of weeks our fundamental view will act as a catalyst for our technical view to playout in a slow and steady manner.
RISK EXPOSURE:5
We will be going in with a 3% exposure on this approach which will be divided into 1.5% each on separate entries got a good dollar cost average due to out view that this lines up well with our fundamental and technical top down analysis.
Excited to see what the next few weeks will present us with this pair.
as we say we plan the trade and trade the plan. we stick to out rules regardless of the outcome wither win or loose as risk management is key in every position we take in the markets.
have a lovely trading week guys. God bless :) and trade safe out there
Trade closed: target reached:
not as expected
Trade closed: stop reached:
correction... not as expected. stop loss hit