TradeOutLoud's favorite trade of the week:
AUD/USD double bias, short term long bias and long term short bias
The Reserve Bank of Australia (RBA) kept rates unchanged at 2.5% at the September 3rd policy meeting. The positive numbers from Building approvals and GDP along with recent imporvements in China there are less odds that there will be a rate cut by the end of this year.
We have a long / short bias on this currency trade, seeing more buying / selling pressure from it's technical charts, here is what we see in the technical levels:
On the Daily chart we are in a strong downtrend that has initiated with a breakdown of support last May. Because of the this week's positive numbers the AUD/USD popped over the descending resistance trend line challenging the previous pivot high set back at the beginning of August. There is support from which this currency pair bounces at 0.8900 area and on Friday it ran into 0.9215 resistance area from a double top formation from early August, thus forming a triple top as of Friday September 6, 2013.
Here is the our double approach:
Trade Levels for AUD/USD long position:
Entry : over 0.9200
Stop : 0.9100
Risk : 100 pips
Target 1 : 0.9300 ( 100 pips)
Target 2: 0.9400 ( 200 pips)
Trade Levels for AUD/USD short position:
Entry : under 0.9100 or aggressive shorting under 0.9200
Stop : 0.9200
Risk : 100 pips
Target 1 : 0.9000 ( 100 pips)
Target 2: 0.8900 ( 200 pips)
Watch our video:
* Note: for entries we watch the price action at the time of the trigger and we always enter a couple of pips above the entry price for the triggers in longs and a couple of pips below for shorts and the same for stops.
Recap of last trade:
USD/JPY has reached target 2 area at 100.20
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