AUD / USD has been in a strong run lately, but you know what they say, all good things must come to an end. It seems the couple passed out at 1.0405 and is about to head lower, maybe even break below the rising trend line in Figure 1 hours.
If that happens, AUD / USD could fall all the way to the 1.0200 handle, which is very much in line with last week’s low. That will be my profit target for this latter trade since the fall of potential would reverse when they hit resistance at that level before. I’ll be looking to add a middle position in the area of 1.0260 in the case of the couple breaks well below the lower range weekly.
If 1.0400 is actually the beginning, the important psychological level should hold as resistance and maintain AUD / USD to go further.
As for the foundations of my trade, I am counting on the economic reports than expected, worse than left Australia while I was cooking sausage stuffed mushrooms for my friends. Apparently, Australia, the trade balance report a bit scared when markets were surprisingly a trade deficit of A $ 210 million instead of 1.15 billion trade surplus AUD traders expected.
In addition, AIG Services Index released around the same time, showed a decline to a reading of 46.5 in March from 48.7 in February figure, which suggests that purchasing managers in the industry services grew less optimistic in the last month.
I have to see the impact of the decision on RBA interest rates, although as the report does not show both anti-war statements as I had predicted. Anyway, here’s my recipe for pips this week:
Short AUD / USD at 1.0320, stop at 1.0420, profit target at 1.0200.
Once you add it to my position at 1.0260, I’ll be moving my stop to breakeven and trailing it. As always, I ventured to 1% in my position.