AUDUSD - Deep Pullback Before A Drop?
Analysis:
To start off with this isn't our favourite setup. We don't have any added confluences which whilst aren't required for a trade to be valid in our opinion, they are still a nice thing to see and they provide more confidence. With that being said just because we don't have the these added confluences this setup is still valid and there are a few reasons why fundamentally. Firstly the technicals though. We're clearly able to tell that currently we are in a downwards trend. Price has made a pretty big move to the downside and we expect that this will continue. We're interested in shorting from this area however as at this level we have a key major level of resistance. We expect that this is where the bears will be sat at wanting to push price further down. Fundamentally the USD is the 2nd strongest major currency whereas the AUD is the 3rd weakest major currency so before we even look at any other fundamental data this is already going in our favour. Recently we saw a decrease of 14468 long positions by institutions on the AUD signalling to us that we might want to stay clear from going long on the AUD. Institutions have access to a lot more data then retail traders so if they are staying clear from buying the AUD then there is probably a good reason for this. Knowing this helps out our idea and is another reason on why we are short AUDUSD.
Please feel free to leave any comments you have and like this idea if you agree with us. Any feedback or comments will be read. We appreciate it all.
Stay Safe - JPI
Disclaimer:
This does not constitute as financial advise. We are not responsible for any monetary loss that you endure. Trading is hard to be profitable with and we take losses just like everyone else does to. Our ideas won't always be correct which is why we urge you to always do your own analysis first before entering into the market but please feel free to use our analysis to assist you with yours.
To start off with this isn't our favourite setup. We don't have any added confluences which whilst aren't required for a trade to be valid in our opinion, they are still a nice thing to see and they provide more confidence. With that being said just because we don't have the these added confluences this setup is still valid and there are a few reasons why fundamentally. Firstly the technicals though. We're clearly able to tell that currently we are in a downwards trend. Price has made a pretty big move to the downside and we expect that this will continue. We're interested in shorting from this area however as at this level we have a key major level of resistance. We expect that this is where the bears will be sat at wanting to push price further down. Fundamentally the USD is the 2nd strongest major currency whereas the AUD is the 3rd weakest major currency so before we even look at any other fundamental data this is already going in our favour. Recently we saw a decrease of 14468 long positions by institutions on the AUD signalling to us that we might want to stay clear from going long on the AUD. Institutions have access to a lot more data then retail traders so if they are staying clear from buying the AUD then there is probably a good reason for this. Knowing this helps out our idea and is another reason on why we are short AUDUSD.
Please feel free to leave any comments you have and like this idea if you agree with us. Any feedback or comments will be read. We appreciate it all.
Stay Safe - JPI
Disclaimer:
This does not constitute as financial advise. We are not responsible for any monetary loss that you endure. Trading is hard to be profitable with and we take losses just like everyone else does to. Our ideas won't always be correct which is why we urge you to always do your own analysis first before entering into the market but please feel free to use our analysis to assist you with yours.
Trade active:
Price has met our entry criteria and our order has been filled. We are now short AUDUSD expecting that price will continue on its move to the downside and the USD news that is coming out later today could be a major help to this trade but we won't know this until later.
Comment:
Recently we've had some news events that have come out and had a negative impact on our trade however this isn't necessarily a bad thing. In recent news events we've seen some worst then expected news for the USD and some better then expected news for the AUD but price hasn't really moved too far. We'd expect that price would of shot off to the upside but this isn't the case which shows that there still isn't that bullish momentum for AUDUSD but rather there is still a lot of bearish momentum which works in our favour. Today we have unemployment claims coming out for the USD. If these come out positive for the USD then we expected that AUDUSD will have a big drop due to the bearish momentum and now this catalyst. If the news comes out negative for the USD then we will have to re-evaluate from there and see what type of price movement we get as we just can't see any bullish momentum currently.
Trade closed: stop reached:
We had some news come out for the USD which was worse then expected so we've seen price breakout and hit our stop loss. This trade was still valid and met our trading plan however the recent news events didn't play out in our favour. This is fine though because this happens sometimes and for the last 4 weeks we've had the news events come out in our favour. Taking losses is just part of trading. Move on from your losses if you stuck to your plan and look for the next opportunity!