LONG AUD/USD
@ 0.7670
SL @ 0.7570
updated Feb 3rd 420 pm EST
we got out of this trade prior to the weekend close, although it might going higher because of the strength of AUD, nevertheless, we’re not holding anything over the weekend to avoid any uncertainty during the current sentiment and also to avoid RBA meeting surprise price in/out prior to Monday.
- we were waiting for this report of NFP to exit our existing USD LONG trade with USD/JPY previous, regardless of the result we don’t want to hold USD over the weekend due to the negative sentiment from Donald Trump. The NFP was expected to be positive and the focus is really on the wage growth as we had a lower wage last time and since the job market had been almost full, the FED is really looking at the wage and whether it can pick up. Then after the NFP, we had positive deviation on Non-Farm Payrolls & Private Payrolls but higher unemployment rates and lower average earnings m/m with negative deviation. So the result was actually a mixed, but i got out of my USD/JPY because of the payrolls were already expected to be positive. We had a positive deviation on Wednesday’s API number as well, so even though today we had another positive deviation, but looking at the context it was not really a “surprise” anymore because people had been expecting it. However, the surprise came from the higher employment rate and lower wages, especially the wages which was also the headline of this report. Because of that, i think this report is actually a negative deviation, plus the current negative of sentiment of USD and most likely of traders to selling or at least not holding it for the weekend, i think USD will be sold off today again. After I got out of my previous USD/JPY, i got in long AUD/USD on this risk event surprise. The reason I chose AUD/USD because with the absence of USD, AUD will once again take the lead for the currency to buy, on top of that, the higher trade balance this week also boost AUD. Next Monday we will have RBA rate decision which all census expects RBA to hold. The only risk was the early report of China raising short-term interest rate to control the real estate bubble and debt issue. This has pressured the Asian equities and commodity futures, but i was expecting a sell-off in AUD during the London session which did not happen. Because of all these evidence, i think AUD remain to be very strong and that’s why i pick it to pair up with the weak dollar.
- The catalyst was the NFP which came out with mixed result of positive numbers but negative wages. As the market was focused mainly on the wages and the positive employment datas were already expected, so I think this report actually is a negative deviation with worse than expected lower wage to further put FED rate hike possibility behind. On top of that, USD continued to suffer form negative sentiment of Donald Trump and I expect a further sell-off prior to the weekend as most traders will not want to hold USD over the weekend in front of possible comments/actions from Donald.
- We’re in the PP level and that’s why i got in, at 0.7670 with standard 100 pips SL. I’ll have 2 handles to support @ 0.7650 & 0.7600 + 100MA at 0.7615 and 200MA @ 0.7580.
- The risk is whipsawed or range bound, i’ll have to see what happen after Wall St opens and London closed, but I’d wish to exit prior to the market close, but i’m much confident in this trade as the risk of holding USD is to the downside right now. AUD is most likely unaffected with any major news for the next session.
- The future projection might be a shift in USD as we do have positive numbers and deregulation of banking regulation by Donald Trump today possibly, but the the existing sentiment is negative for USD and positive for AUD, the existing fundamentals are also neutral to bullish for AUD for this week and neutral for USD as the lower wage really gave dollar a blow.
- Yes i got in this trade already and now will see how Wall St opens for it.
LONG AUD/USD
@ 0.7670
SL @ 0.7570
updated Feb 3rd 420 pm EST
we got out of this trade prior to the weekend close, although it might going higher because of the strength of AUD, nevertheless, we’re not holding anything over the weekend to avoid any uncertainty during the current sentiment and also to avoid RBA meeting surprise price in/out prior to Monday.