Last night’s AUD trade performed perfectly but the bottom was missed by 2 pips. I mentioned bottom at 0.7332, price dead stopped at 0.7334 and headed straight back to our target at 0.7370. It was a good round trip trade despite 0.7344 range point in our way. In future trades, I want to outline more round trip trades where we hit bottoms and tops then reverse to profit like 100 pips on the full round turns per currency pair trade. EUR/USD however never saw its intended bottom at 1.0810. It dead stopped at 1.0848 from our sell point at 1.0873 and it ranged in the 1.0848 location for hours. As I analyze the comparisons in the trades, EUR/USD to travel to 1.0910 meant AUD had to go down further and break the cluster at 0.7331, 0.7332, 0.7334. I will monitor these situational types in the future so never to fall into that trap again. NZD posted this morning performed as written but my post was late.
EUR/USD Bottom 1.0812, last night Bottom 1.0810. Overbought Sell point 1.0890 – 1.0962. I cannot help the wide variations, its in the numbers. I will outline the points in between as sell points. First 1.0890, 1.0893, 1.0913, 1.0921, 1.0937. The first focus sell point 1.0913. Most important sell point focus 1.0913. What’s happening is ranges are opening wider as was seen this morning in NZD. The full range is 1.0695 – 1.0975 then 1.1039. Note our sell point at 1.0913 and above are all below the range at 1.0975.
Strategy. Sell 1.0913 as first focus. Points on the way down, 1.0893, 1.0890, 1.0872, 1.0866. Shorts must break 1.0869 and 1.0867 to target the range bottom at 1.0812. So far a tough bottom here for 2 days so don’t marry exact target.
AUD/USD Next and AUD/NZD
Brian Twomey, Inside the Currency Market, btwomey.com