Aussie update...
In Wednesday’s analysis, our team’s focus was primarily on a potential fakeout being seen below H4 demand at 0.7866-0.7850 into a H4 Quasimodo support level at 0.7839. On this occasion, our analysis proved to be correct.
Not only did 0.7839 align nicely with the top edge of daily demand at 0.7838 and nearby the top edge of the weekly support area at 0.7849, there were also likely a huge amount of stop-loss orders planted below the current H4 demand. Remember, when a buyer’s stop is triggered it becomes a sell order, which is ideal liquidity to buy!
Our pending buy order at 0.7839 was filled and price rallied to a high of 0.7882. By this point, considering the stop-loss order was positioned at 0.7805, we had more than one times our risk in profits so we reduced risk to breakeven. And just as we did that, the unit began to turn red! Should we have taken partial profits when we had the chance? Maybe! However, our plan was, and still is, to wait for price to tap 0.79 before taking profits.
Suggestions: Despite price trading near our breakeven point, we still believe that this market is headed higher. Therefore, we’ll continue to hold our current position and see how price action unfolds going into London.
Data points to consider: RBA Assist Gov. Debelle speaks at 10am. US GDP q/q and US Unemployment claims at 1.30pm, followed by FOMC member Fischer speaking at 3.15pm GMT+1.
Not only did 0.7839 align nicely with the top edge of daily demand at 0.7838 and nearby the top edge of the weekly support area at 0.7849, there were also likely a huge amount of stop-loss orders planted below the current H4 demand. Remember, when a buyer’s stop is triggered it becomes a sell order, which is ideal liquidity to buy!
Our pending buy order at 0.7839 was filled and price rallied to a high of 0.7882. By this point, considering the stop-loss order was positioned at 0.7805, we had more than one times our risk in profits so we reduced risk to breakeven. And just as we did that, the unit began to turn red! Should we have taken partial profits when we had the chance? Maybe! However, our plan was, and still is, to wait for price to tap 0.79 before taking profits.
Suggestions: Despite price trading near our breakeven point, we still believe that this market is headed higher. Therefore, we’ll continue to hold our current position and see how price action unfolds going into London.
Data points to consider: RBA Assist Gov. Debelle speaks at 10am. US GDP q/q and US Unemployment claims at 1.30pm, followed by FOMC member Fischer speaking at 3.15pm GMT+1.
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