Thursday, April 7, 2011

AUDUSD—new highs

AUDUSD reached a new high this morning of 1.0495. This was the first of several price targets in a zone that extends to 1.0550/95. I've unloaded some longs but still have two positions. I'd expect a reaction between there and 1.0600. Note that some trend lines intersect near 1.0700. (I don't disregard old broken trend lines). There are additional price targets up to 1.1400. While it certainly would not achieve that soon, this currency is a bullish freight train. Since the low in 2008 of 6007, Aussie has gained 4,488 pips, a gain of 75%. One could have done far worse than to simply buy dips in this currency. Commodity currencies in general are strong.

There is negative divergence on the daily chart. However, daily candles are strong—they are not throwing off many upper shadows. If it were, it would be a hint the market is rejecting higher prices.

Support is at 1.0289/57.

Here's the daily chart:

© Dianne Fecteau, 2011. No part of this material may be reproduced in any form, or referred to in any other publication, without the express written permission of the author. My purpose in writing this blog is to show you how one trader, me, makes trading decisions and survives while trading Forex. One of the biggest problems I had when I first started trading was trying to apply the “rules” to actual trades. Another was the psychology—limiting losses and letting profits run. If you study my blog, you’ll see how I deal with both those issues. So my writings are not trade recommendations but rather educational in purpose. You have to decide on your own approach to trading. Remember that trading is risky.


  1. Looks like AUD is flying up up and away! LOL!

    I don't trade AUD, but having such strong currency isn't good for us. Might get the Reserve bank to increase interest rate and that will not help. The hot money will probably keep coming in and pump it up higher. I do think it should stop somewhere.

  2. It will stop somewhere, I agree. I don't trade on fundamentals but there are some issues that should be causing traders to re-think their bullishness. Interestingly enough, the COT report shows 91,791 non-commercials being long versus an astoundingly low number being short (6,226). There have only been 23 times since the beginning of 2007 when the ratio has been so skewed. Of course, if the market turns, that means big drops as the non-comms bail out of their positions.

  3. Wow! So skewed! The numbers are amazing. Thanks for sharing. It's like just close 1 eye and keep buying huh? LOL!

    I don't trade on fundamentals either. Fundamentals are always too late too risky too deadly. Fundamental is for fun only (to be taught at colleges/universities) that's why it is called "fun"damental :o)