What’s Up With AUD/USD And Our Long Term Signal?
Skerdian Meta • 2 min read
A couple of weeks ago we opened a long term sell forex signal in AUD/UD. It was the perfect chart and fundamental setup.
Technically, AUD/USD was trading just below the ascending trend line which connects the highs of the last two years.
That trendline came at 0.7720. About 100 pips higher we had the resistance level which is an additional safety indicator.
All higher time frame charts were overbought and the daily candlestick formed a perfect doji, which is a reversing signal after an uptrend, according to candlestick trading strategy.
The doji below the trend line was the perfect selling signal
Fundamentally, the pace of US economic growth was picking up and still is. The USD was oversold against most major currencies, so a reversal or a retrace was due.
Well, though the retrace happened, the reversal didn´t. AUD/USD dived around 140 pips over the next few days, but the 200 SMA on the daily forex chart held the decline and reversed the price back up.
We should have closed this forex signal back when we were more than 100 pips in profit. I usually move the stop loss into profit on such occasions, but we don´t have that option yet, so I have to let the signal run its course.
I heard that one of our followers went down with this signal today. I would wait to drag the stop loss down to break even when a trade is at least 100 pips in profit.
The miss in US inflation data last Friday and the selloff that we´re seeing today, due to the US Congress failing to pass the health bill, is sending the USD and AUD/USD downward.
The 100 SMA (red) is where we have our hopes for a decent resistance
We moved the stop loss above 0.80, so now we are left with just two indicators protecting us. The 0.80 area is a big round level in itself which is supposed to provide solid resistance. The 100 SMA (red) comes just below there, which is supposed to add additional strength to that level.
The climb seems to have stopped for now, so perhaps the sellers are returning. We have the Australian employment report expected on Thursday, so hopefully, that will turn things around for the Aussie. Or, perhaps we can expect something coming from America, fingers crossed.