AUD makes ground on crosses; stop-loss driven rather than any fundamental change

AUD/USD reached highs just above .9340 overnight, which is exactly where the hedge fund trailing stops were reported to be. It retraced immediately by almost 100 pips which suggests that the rise was totally stop-loss driven in the first place. The AUD also made decent gains against the EUR and the GBP and the worst seems to be over for the Aussie, for now at least.

The AUD/USD has a series of higher lows on the hourly (see chart) so I still think it makes sense to play from the long side intraday. I reduced my long position on 2 occasions overnight and am now sitting with a much more comfortable position with a healthy size and average. Big improvement from earlier in the week! Now its a matter of letting it run and hoping for the best.

Good luck today.

  1. Morning Sean ( there:) ). Agree on stop loss hunting. Thanks to our friend FXWW888 for the heads up to stops in EURUSD below 1.30. Things are on the edge with both euro and cable at 62% retracements of last major leg higher. DXY is at 62% of the fall so next move is bound to be significant. I noticed the divergence from stocks which rallied on the taper relief yet the dollar hasn’t lost ground. We’ll see tomorrow after good batch of eco data. Still with you on the Aussie long side , commercials are still heavily loaded long. Have a great one !

  2. I was stopped out on my aud/jpy short from last night. I got in at 90.75 and had a stop at 91.14. It only reversed. Took another short at 90.88 and recouped my loss and made some little pocket change. I still think the 91.15/20-89.90 is the range to play right now until one of those levels has a clear, concise break.

  3. Hi Sean, Cleared the decks on the rally overnight and now buying back in around .9275.

    Thanks for your thoughts. Your level of confidence seemed to be waning a bit yesterday despite creeping positive price action. You seem more confident today even though that resistance anticipated above .9325 was solid.

    The pair seems to be struggling given the positive developments (or end of really negative) aren’t producing positive price outcomes.

  4. Yes indeed James, sideways price action is certainly a bit concerning. No matter, I reduced overnight to much more comfortable position size so I’m happy to sit back now and let mkt decide if I’m right or wrong. I have a feeling that NZD will lead the way higher but as I’m usually the world’s worst NZD pundit, that might be a reverse indication 🙂

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