- EUR is in a weak spot, with less promising datas recently, a very firm stance of QE to continue from ECB, a risk election in France and a debt issue with Greece, both fundamental and sentimental are in against EUR for now. On top of that, we have a strong USD now fuelled up by fundamental strength and less negative sentiment to fuel up the risk on sentiment to further push down EUR. Meanwhile, AUD has this strong backing from RBA and the outlook from the sentiment part is still looking well. The commodity price continues to pick up from Chinese demands and AUD has been on a good ride for 2017 so far.
- The catalyst was the global sentiment and weaker EUR fundamentally and sentimentally speaking. We also have a nice Bearish Big shadow today to break below a new zone.
- We’re oversold in daily perspective but still has many room to go downside.
- The risk is a large reracement which can happen if we have another negative data from AUD, however, because of the confidence of RBA and the employment datas tomorrow has already expected to be a negative number. We think until Feb 28th GDP from AUD, we should keep seeing some strength into AUD versus EUR, or we should see more negative sentiment in EUR to help AUD. Since the fundamental bias is very strong now and that’s why we’d like to enter on that.
- I’ll manage it with the fundamental datas of AUD, because if AUD can surge on top of the negative fundamental datas, then that means RBA has way more weight to push AUD up and if we can have some nice fundamental datas down the line especially the GDP, then AUD should continue to go higher as people’s belief now.
- Yes but leave a bigger stop loss area for the short-term sentimental retracement.
SL @ 1.4013
P @ 1.3573
SL @ 0.7620
P @ 0.7852
SL @ 86.04
P @ 89.32
****updated Feb 20th 3am****
Last week we saw a large retracement in all our trades in EUR/AUD, AUD/JPY & AUD/CHF.
There weren’t any fundamental reason to back the action, and the cause was most likely the volatility from the risk off sentiment and worries over the unexpected weekend events.
There weren’t any fundamental reasons for us to get out of the trades, the current global sentiment is still strong by the higher high equity markets, higher bond yields and the 3 currencies of JPY, CHF & EUR are still in a negative terrorizes without any fundamental reasons to go up.
However, traders must understand that sometimes the reatracement from the sentiment can be very large to stop us out, and that’s part of the game and the risk that one must be willing to accept.
****update Feb 20th 9pm****
Today was a holiday and we only had very small movement, however, 1.39 seem to be holding well as a resistance for EUR/AUD and our fundamental bias is still valid for us to keep holding this trade.
As for AUD/CHF, exact same picture with 0.7650 to be well supported and now slowly edging higher with same valid fundamental bias.
AUD/JPY also is in the same picture with 86.50 holding well supported, and now looking to the upside to test 88 again.
****updated Feb 22nd 1am****
After the large retracement last week, EUR/AUD continues its trend to the downside. The fundamental bias is so strong in this trade and the sentimental bias also has become strong to support AUD and pressure EUR. We think EUR will keep its bearish stance at least until the end of French election in April and May.
AUD/CHF & AUD/JPY are also in the same situation with clear fundamental bias for AUD. The uptrend direction is a certainty but the timing is not in our control. As long as the fundamental bias is still here, we’re holding these trades.
****updated Feb 23rd 7pm****
For EUR/AUD, we had a bit pause after we have reached the low of 1.3627. The general direction is still to the downside and we’re holding this trade for now.
For AUD/CHF, we’re having a nice inside bar with strong uptrend now. The direction of this pair is still going up with strong fundamental bias.
For AUD/JPY, although the fundamental bias is strong, but Yen has been very bullish recently due to the global uncertainty and safe heaven inflow outside Euro areas and U.S politics.
We’re still confident for the general direction, but perhaps less confident in this pair as if we have negative GDP from AUD next week, the downside movement of JPY will be large enough to stop us out.
We might consider to get out at BE to wrap up this trade.
****updated Feb 24th 5pm****
Today was another sentimental driven day with continuous selling into USD and AUD while JPY was the winner of the day, the week.
Our EUR/AUD tried to close above but failed to do so and now is still looking bearish from technical point of view.
AUD/CHF is still holding well and because of the weakness of CHF, we think the fundamental strength should continue to support this pair.
AUD/JPY got stopped out because the JPY buying was simply too large and AUD had been sold off cross the board on risk off sentiment and Metal prices dropped previous days.
Technically this was one of the risk by doing a breakout trade, as i’m a big advocate for buying low and selling high and will favour for reversal trade then breakout trade.
****updated Feb 28th 9pm****
we had a not so perfect Kangaroo tail today and since the GDP of AUD has come out so positive, i have decided to put on a pending order at the level of 86 with SL below 84.5 and profit at 88.
SL @ 84.5
P @ 88
****updated March 2nd 7pm****
we readjust our position in EUR/AUD today and now our entry is at 1.38 while SL at 1.3950.
Today due to the AUD weakness we had a nasty draw down now.
This of course was unpredictable as we think 1.38 was a good level to get in with proper resistance and good candlestick signal.
We will see how this trade play out.
AUD/CHF barely survived now with SL at 0.7620 and current price at 0.7671.
Again, this was a breakout trade and the risk is always buying at high if that high did not become the new low.
AUD/JPY pending order is still in.