- FED Yellen is testifying in front of congress today and the main catalyst was a conformational tone that a 3 hikes in 2017 will be the plan as according to their Dec 2016 forecast and that waiting too long to tighten would be unwise. The statement was released before Yelle speaks so i have missed the initial action and now it’s too low to get in as we’re right above S2 in EUR/USD. I’m going to put pending order at Whole Number 1.06 with SL at 1.07 which is above R2 and 2 swing highs in hourly chart. Target is at 1.0500 as we have another CPI data tomorrow which might push dollar even higher.
- the Catalyst was Yellen speaks, the belief was for a strong USD but it’s rate to hear it from dovish Yellen to confirm the possibility of 3 rate hikes.
- We’re oversold now so i’m waiting for a pullback at handle to get in and possibly hold it until tomorrow as we have inflation datas tomorrow and Yellen is due for speaking again which might push dollar even higher.
- The risk is large rebound from profit taking so i’ll use 1.0750 as 150 pips instead of 100 pips.
- The future projection is a continuation of bullish dollar but we might need new fresh sentiment to push it down further.
- Yes but be careful for large round and be able to hold it through to the downside. Also watch out for any extremely negative sentiment from Trump.
Pending Short EUR/USD
SL @ 1.0750
****I ADDED AUD/USD SHORT
the reason is because a strong dollar will mean a much weaker AUD, on top of that, AUD still has a possibility of rate cut unlike NZD, and AUD still is in a larger swing from commodity price swing high now. Any shift in the commodity price run or further slowdown in China will tank AUD as it has climbed so high since 2017.
The other reason is because we are heeding dollar with NZD/USD long now but we are much more confident in USD from today’s incident and will like to increase our dollar exposure to 3% - 1% = 2% now.
we’re also in GBP/AUD short which this AUD/USD trade will be a hedge for that as well.
But in conclusion, we’re now very confident in USD and think fundamentally it performs better than AUD and sentimentally it has now shifted to the upside and has more room to go up comparing with the already high AUD. Again, we’re betting that an overbought AUD will tank very fast for us to profit.
Pending Short AUD/USD
@ 0.7650 AT PP LEVEL
SL @ 0.77 AT R2 AND SIGNIFICANT DAILY RESISTANCE
P @ 0.75
****updated Feb 14th 7pm****
our EUR/USD pending order is still not yet filled and we’re holding it until Asian closes. It shows how weak EUR is now versus USD and fundamentally and sentimentally, EUR is both in a bearish mode. Meanwhile, USD has the fundamental bias versus EUR and now since the negative sentiment has not only been removed but changed to a positive one by Yellen today, we will expect further downside movement for EUR/USD.
AUD/USD on the other hand is a bit under water because the AUD strength to the upside is still very strong as the new consumer confidence from Asian session has been so much better than expected.
Meanwhile, the risk on sentiment from USA is going to help AUD as well.
As mentioned, our reason to enter AUD is because we thought the fundamentals do not back up AUD and once the USD has stronger sentiment than AUD, then AUD should see some major pullback because it has been overbought for quiet some time.
However, we don’t want to get caught up in the sentiment as AUD might still go up even higher before we see a real catalyst to drive it down.
We’re currently in a drawdown of 15 pips and can just exit now to prevent any nasty surprise.
Hourly chart which is what we were trading for, we are still in a retracement of 38% now and we went as high as 23%.
0.77 is still strong and there are no major news to really drive both AUD or USD for now.
i do want to at least let it touch 100% again and either take profit or move SL to BE.
But i’m also afraid that it could keep going higher to touch 0.77 before it comes down.
We perhaps have set our SL to close on this trade and now i really kind of regret of my tight SL...
zoom out in the hourly chart, 0.77 is still a very strong resistance that has been broken out from the previous strong rally of AUD, from the RBA positive sentiment to positive trade balance in both AUD & China and the negative sentiment of Donald.
we have tried to test 0.77 again today prior to Yellen speech and was once again failed to break it, because of that, i think unless there is major fundamental data that is about to come in the next sessions or so, otherwise i might as well keep holding this trade for the next session as i suspect new sellers will come in to price in prior to the next Yellen speech later in NY session and the new U.S inflation datas.
In conclusion, i think there is more possibility for AUD/USD to go south than north and my only and biggest concern is not the direction of this trade but my execution of this trade as my SL was way to close and i’m really regretting this part of my management.
ok let’s hold it for now and see how it goes after Asian session.
****UPDATED FEB 15TH 4:30AM****
dollar continued to gain strength across the board but so does AUD, and we’re only 15 pips away from our SL.
Because of my fundamental bias toward USD, i do think AUD is due for a retrace but i do not want to get whipped saw only to see it going lower.
As mentioned, we do expect a lower employment data today and also a strong resistance at 0.77 in AUD/USD, so i have decided to cancel my EUR/USD trade and instead increase my SL in AUD/USD.
So my total risk capital in this dollar trade was the same as before but i eliminated EUR/USD PENDING SHORT in order to have wider stop loss for AUD/USD.
As mentioned, it was a bad management of mine to not use a wider stop loss in the first place.
But we’ll see how this trade works.
***UPDATED FEB 15TH 9AM****
The inflation datas and retail sales m/m datas both core and headline from U.S have been amazing this morning with another strong solid fundamental picture. USD continued to surge higher and w’re still holding this trade.
The downside is that although USD is very strong now but still lost ground to AUD & NZD as the commodity currencies currently are taking the lead.
However, the strong dollar might send equity markets down because FED is most likely going to raise interest rate possibly in March. We might actually have a risk off sentiment for U.S equities today and hopefully that will cause some selling into the commodity currencies.
My biggest risk is still any negative USD will send AUD up.
I’m planning to exit half at handle 0.76 if we can reach there and set SL to BE and expect the employment datas from AUD later today will send the pair further down, or stop us out at BE.
But i need to see it touches the handle 0.76.
If we fail to do that, i might just get out of this trade.
I still have Yellen speech as another possible catalyst to push USD higher later on so i’m holding it now.
****Feb 15th 6pm****
we’re now right above 0.7700 and edged higher.
I don’t really have any fundamental reason for this as U.S had another great fundamental datas today and Yellen and other FED members had maintained their hawkish stance if not only more hawkish by other Fed members.
This can very well be profit taking, risk on sentiment and simply the general belief that people just want to buy AUD.
We will have the employment datas from AUD in another hour which will be our last push to either get stopped out and be in our favour, the chance is 50/50 as no one knows.
The expectation is another soft employment data and i’m still fundamentally bearish on AUD but as mentioned, the sentiment can push a currency for a long time and i might be too early once again to get in this pair.
If that’s the case, then i’m really having a hard time to execute this kind of trade and it’s better for me to have a much wider stop loss in the future as i’m not the best at timing things.
(just on the side note, i did thought about LONG AUD with weak currencies such as AUD/JPY & AUD/CHF OR EUR/AUD short upon deviation to hedge this trade, but all AUD pairs are at high of daily pivot already, meaning people are already pricing in for AUD for whatever reason, so no more opportunity for us and if we get in, we will be braking our rules and imply revenge trading.)
****FEB 17TH 1AM****
I’m still holding this AUD/USD trade and basically stuck in this range between 0.7685 - 0.7735.
The average daily range is 66 pips and is getting lower and lower.
We’re currently at 0.7710.
I’m still holding it because fundamentally and sentimentally USD is still stronger than AUD, but the problem about this trade as mentioned before, was the narrow range of stop loss due to my own mismanagement.
We did finished the day with red candle and hopefully we will have further pullback to the downside for today.
AUD is up against a very strong resistance area and fundamentally also lost ground versus dollar, but as mentioned, my stop loss is simply too close and very possible to get whipsawed.
****updated Feb 20th 3am****
we finally have a crossover between 25 SMA to 100 SMA and 0.77 has been a strong resistance for now. Today we will have the RBA minute and also 2 speaking from RBA governor Lowe to potentially push AUD higher as RBA is hawkish before. However, traders want to see a more concrete fundamental data before another flow of buying into AUD.
We’re still holding this trade for now as fundamentally speaking USD is still stronger than AUD.
****Feb 23rd 7pm****
I got out of this trade at 0.7707.
The AUD is still very strong versus USD and the GDP next week from AUD might be another boost to push AUD up. Meanwhile, USD still remains sentimentally negative.
Today we saw the price action although failed to reach our Stop but had gone higher and higher.
Most importantly, this trade was managed poorly with too much leverage in the first place and it had really bothered us psychologically to hold a trade that we did not plan well.
Therefore, i got out when the price came down to the original stop loss point and control the risk to 1%.