Australia

Australia hiked its interest rate last night. AUDUSD and AUDNZD both moved up smartly. I bought AUDNZD based on the chart I posted yesterday. I am now out. Why not stay in since I often do that when I’m in profit and can move my stop to such a point that I keep some of those profits?

One reason is I’m thinking of shorting. There is the downtrend as you can see from the chart yesterday. Always go with the trend, you hear. Well hip, hip hooray for the trend followers. What are you supposed to do in a sideways market? I’m not afraid to go against the trend if I see clear signals. Being with the trend usually leads to bigger profits and it’s often “safer.” But in this case, because of conflicting signals across different time frames and because of the current price behavior I lean short. So I had to close my long position.

With both pairs, I’m surprised there’s not more oomph from the rate hike. Ozzie should be on track for .9000 and wouldn’t that be grand? But let’s watch it. Let’s see how it unfolds. Many people are already counting their profits from that level and the market has a way of not going along with the best laid plans of mice and men.

None of the above are trade recommendations. Remember that trading involves substantial risk.

© Dianne Fecteau, 2009. 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.

AUDUSD and AUDNZD

AUDUSD

The one hour chart below shows the Ozzie bounced decisively off a low of .8569 Friday. My short was profit stopped out Friday with a tiny 15 pips profit. Now I’m out completely. We’re just going to have to see whether it starts to stumble again as it approaches its highs.

The hourly chart has some interesting things on it. The bullish candle that followed its bounce off the low would have pointed to taking a long position had I been paying attention. I wasn’t so I didn’t. The second bullish candle is also promising. What still concerns me about the pair is the RSI.

So what will I do? If it falls back to the up trend line (drawn in blue) I may try a small long position. If it reaches last week’s highs and stumbles I may try a short. It may be stumbling now so I’m dropping down to a 15-minute chart to watch it. But there’s nothing definitive to indicate a short just yet.

AUDNZD
Speaking of AUD, the daily chart for the AUDNZD shows that it’s nearing the bottom of a downward channel as well as touching an upward trend line. I may buy. It’s easy to risk since I can set a tight stop. Here’s the chart:

None of the above are trade recommendations. Remember that trading involves substantial risk.

© Dianne Fecteau, 2009. 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.