After analysing a bunch of tech on the AUDUSD (too much to list here) I have come up with the following trade
Sell AUDUSD from here or on any sort of spike.
Stop above 71.80. No profit target, but trailing stops should start when the AUD breaks below 70c. There is a chance that we are at the start of wave 3 which should put the AUD firmly below 70c.
Finally, being part of the Australian economy, my gut instinct is the central bank will cut rates in the next few months, but it will be a surprise move, so risking being short the AUD could have big pay offs.
Near term sticking points will be FOMC meeting (March 2019) and Australian unemployment the following session, however I am treating these as a chance to sell any potential spike rather than taking the trade now in an effort to get more room on the trade
Sell AUDUSD from here or on any sort of spike.
Stop above 71.80. No profit target, but trailing stops should start when the AUD breaks below 70c. There is a chance that we are at the start of wave 3 which should put the AUD firmly below 70c.
Finally, being part of the Australian economy, my gut instinct is the central bank will cut rates in the next few months, but it will be a surprise move, so risking being short the AUD could have big pay offs.
Near term sticking points will be FOMC meeting (March 2019) and Australian unemployment the following session, however I am treating these as a chance to sell any potential spike rather than taking the trade now in an effort to get more room on the trade
Comment:
This is the fade zone I was talking about. I am posting this just after J Powell has finished Q and A. I have taken AUD shorts in this area with an eye to Australian UE, which is in about 5 hours at the time of writing
Comment:
Trade is still alive on a chart (sadly, I stopped out), but my gut tells me the AUD may move higher now, so I'd recommend covering at least half the position. Still potential to fall, and it's still a chance I will be kicking myself in a few days.
Comment:
The movements on DXY have me stumped at present, so I'd recommend tightening stops right up to protect profits. These are dangerous, uncertain times in currencies and I just don't know if this latest move is a complete rejection, or a dead cat bounce....time will tell