Since everyone seems to be having a bit of fun with the AUD/USD let us just have the readership chime in on why they like or don’t like a position. As I have stated I am still short (from a rather poor entry). Also, sometimes I get them wrong. If I were perfect it would be Goldman Sachs Legett. So the breakdown:
Pros for the short
- It is with the trend
- price has bounced off the weekly upper trendline
- poor China data
- with the exception of the ABS report Aussie data has been poor during the shift from mining
- continued falls in metals
- whether quoted out of context or not the market still has .85 psychologically in the back of the mind
- wave 5 or 3 if you don’t count the pull backs
- taper taper taper
- risk to reward is easily at a 1/3
Cons for a short:
- Oversold on weekly,daily, and h4 charts
- possible inverse head and shoulders
- strong ABS numbers
- tandem pair strength from Kiwi
- Chinese data may be leveling off
- price heading back to upper line
- Aussie shift from mining starting to stabilize
- all my buddies went long (you think I’m kidding but it plays into the psychology)
Win or lose on this trade I believe the pros out weigh the cons in the shorter term. It may seem like some of the pros and cons are the same, well they are, that is the matter of how the market will choose to interpret it. I might be wrong, wouldn’t be the first time. But I believe I have made an informed decision for the trade, regardless of the outcome. Now its your turn, how do you see it?
