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AUD/CAD - Short Position Explained

My first trade for this month was shorting AUD/CAD which in the end ended up to be a break-even trade. I didn't even realized I'm trading an aussie crosses because I was expecting AUD/USD to react positively on the RBA rate decision and thus all the other crosses will react, more or less, AUD positively. But since I overlooked this thing I entered short on AUD/CAD based on a small retest of an old support now turning resistance (see Figure 1).
Figure 1. AUD/CAD 1h Chart

My forecas…
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RBA Set to Cut Rates

First major event risk of the week is set to be RBA interest rate decision. Last time I was correctly predicting a no move from RBZ, basing my decision on the inter banking futures rates which have been predicted 24 of the last 25 RBA decisions correctly. The OIS market is pricing in an 80% chance of a cut in April.
You can read more about it here: RBA Keeps Rates on Hold
When you have an indicator with such a high level of accuracy it's undoubtedly mistakenly to ignore it. Both the, aussie 9
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Aussie Elliott Wave Cycle Final Stage

Aussie is in the final stage to complete the Elliott Wave cycle that begin with the 2013 sell off. So far the market has corrected the sell off that started from 2013 with only 2 wave that can be subdivided in another 3 wave of smaller degree. Based on my Elliott Wave count we're in the final stage to complete the whole cycle. Right now wave C is developing and we should expect another 3 waves of smaller degree. We need a break above 0.9400 to complete wave "a" and than a resumption of the curre…
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Daytrader21 avatar
Daytrader21 22 11月

Update 1: In the short term the upside remains favorable in order to complete another abc sequence which will forma wave C of higher degree. It appears that we're forming a small double bottom at 0.8560 and as long as this level holds expect more upside. For next week resistance is at 0.8800 level.

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Daytrader21 29 11月

Update 2: Although we break below we haven't succeed in breaking the big round number 0.8500 suggesting that the bulls may be still in charge, at least on the short term. Next week if we break below this level it may be the case we're heading lower much more sooner than i was expected.

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Update 3: The bearish trend has started resuming to soon and it may be the case my timing on this forecast to be wrong. However during this time of the year there can be big spikes in prices and as the dollar bull move may look overextended in the short term we can have a correction.

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Quick Review of my First Trade; Short EUR/AUD

Currency Pair: EUR/AUD
Side: Short
Amount: 5Mill
Time Frame: 1h
Open Price: 1.44607
Close Price: 1.441732
PnL: +43 pips Profit
Open date: 01.07.2014 12:48:49
Close Date: 01.07.2014 22:12:19
Reasons Behind the trade: The only reason why I traded this pair was because I wanted to maximize my profits through a more volatile pair. I was bullish the Australian Dollar which at that moment I felt it's going to break up and at the same time this bullishness will be felt across the board on every …
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doctortyby avatar

A trade journal by the book... congratulations... I'm courious how you will analyze 50 scalping trades in a day :P

Daytrader21 avatar

doctortyby 50 trades/day WOW:)........never done that:)......I like to swing the big waves:).......Thanks

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Aussie Final Stage of Correction

Hi guys today I wanna share with you a trade pattern idea that I've posted in Technical Analysis Contest you can find the original post here: Aussie Final Stage of Correction
Since beginning of last year aussie has completed a five wave cycle to the downside and right now is correcting that cycle which is still in the earlier stage as we only manage to complete wave A, we need wave B to go at least to 50% fib retracement of wave A but at the same time it can go as low as previous swing low but w…
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Giorgio3 avatar
Giorgio3 5 6月

High Great article - very nicely done !!!

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Aussie Pattern Idea(as posted in Technical Analysis Contest)

Since I'm already out of the contest without having any changes to catch any top position I thought to share with you guys some predictions that I have posted in Technical Analysis contest and mainly I want to talk about aussie. You can find my prediction here: Aussie Final Stage of Correction
Since beginning of last year aussie has completed a five wave cycle to the downside and right now is correcting that cycle which is still in the earlier stage as we only manage to complete wave A, we n…
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Omela avatar
Omela 17 5月

good day!)

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Aussie Final Stage of Correction

Since beginning of last year aussie has completed a five wave cycle to the downside and right now is correcting that cycle which is still in the earlier stage as we only manage to complete wave A, we need wave B to go at least to 50% fib retracement of wave A but at the same time it can go as low as previous swing low but without breaking that point in order for our analysis to be correct.
In Figure 1 is the AUD/USD daily chart which shows the Elliott Wave count and future projections. Right now…
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Daytrader21 avatar

Update 1: Aussie has been following this prediction to the pip we already sold of and we should see now price consolidating between 0.9200-0.9300 in the coming months as the Gold Fractal is suggesting

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Update 2: The current rally is just wave x of a much larger correction WXY. Based on Elliot wave we should expect further consolidation between 0.9400 and 0.9200 as the 1 month implied volatility is hitting new lows  we should see the range getting tighter.

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Update 3: It seems we where right from previous update as 0.9400 has acted as strong resistance and now we are heading to develop the final price structure of this correction. Wave X has ended at 0.9430 and now we must develop a flat or a 3 wave down movement. We need a break and a close below 0.9300 strong support level before any downside pressure to persist.

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Update 4: the reaction we have seen from 0.9300 level is a corrective move based on price structure and we should see momentum start piking up to the downside from here on as we couldn't broke previous swing high at 0.9430 which suggest this upside move is very weak.

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RBA Leave Rates Unchanged

Indeed RBA leave the interest rates unchanged which are already at historic low point, this is no surprise as that is the reason why they have been talking down the aussie and making a lot of verbal interventions.
Remember that last year RBA's Stevens said that Australia needs AUD/USD closer to an 0.8500 exchange rate. Basically this was an aggressive verbal intervention from RBA governor who said that lower aussie is preferable to rates to help the economy.
The only reason why he wants lower
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Jignesh avatar
Jignesh 4 2月

I see your point even more now that I've read your article. I think at the next RBA meeting if the AUD/USD is above 0.9000 they will do whatever they can to talk the currency down. Similar to the Dec meeting. Your article has made me shift the time frame I had in mind, thanks.

Daytrader21 avatar

@Jignesh Clarifying your time frame when speaking about a trade it's always good:), otherwise both of us can be on opposite trade and both of us can make money. At this point I don't know how low it will get (for the long term trade) but I do think that after the next big down leg we may see in the next years aussie going up.

Jignesh avatar
Jignesh 4 2月

I was initially thinking we may hit 0.9100 this week which could be an area to watch. Now I'm thinking looking for a short position closer to the next RBA meeting, maybe 3 weeks. But again, it all depends on the price action. I do think a lot of buyers will be coming in at 0.8500 and profit taking - I believe that is the area you are referring to when you say the next big down leg

Daytrader21 avatar

0.8500 is definitely a big psychological level and RBA's governor target as well, but more recently another RBA member has suggested that an even lower exchange rate would be need and closer to 0.8000. But again this is just RBA rhetoric and in today's dynamic world, market policy can change very fast as they have to adjust to current market conditions. I look at it like a puzzle where each day you add another piece and drop out the older one. it's very fascinating game:)

HOANG_MAI_NHI avatar

very good

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Aussie - Bearish Trend Still in Play

Aussie have been trading to the downside in a strong fashion way since beginning of the year. Although we have complete a 5 wave cycle since we break to the downside (figure 1, red wave notes) this is just the first wave of higher degree based on Elliott Wave theory. The reason why we may assume this is the first wave of higher degree is because of the structure of the recent up move, which is an abc formation, corrective in his nature. This abc formation should end the next wave of higher degre…
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Daytrader21 29 12月

Update 1: The market has kept going lower in tight range as expected but due to the holiday season liquidity got thin. We should expect market to push lower in tight range, next big support level lays around 0.8750. we must break and close below that level in order for the downside momentum to stay in place

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Update 2: It seems the market is reacting to previous swing low but as long as we stay below the psychological 0.9000 level the bearish trend should stay in place. it's normal to have some kind of correction at this stage as the market looks oversold but the bigger trend is still to the downside. Expecting the market to find resistance at 0.9000 and than start a new 5 wave sequence and break below 0.8800 level.

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Update 3: The trend has started resuming after we broke last swing low 0.8840 as predicted a now that we have close below it the Wave III is in full development. in this stage the market should start more aggressively moving to the downside. 0.8750 has now become resistance and should cap any upside movement

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RBA Wants Aussie at 0.8500

Yesterday if you where trading or at least watching AUD pairs, was a pretty intense day. Aussie plunged 95 pips in just 4 minutes after some comments from RBA governor Stevens hit the market. RBA's Stevens said that Australia needs AUD/USD closer to an 0.8500 exchange rate. Basically this was an aggressive verbal intervention from RBA governor who said that lower aussie is preferable to rates to help the economy.
The only reason why he wants lower aussie is so he doesn't need to lower rates agai…
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jezz avatar
jezz 13 12月

Aussie usually ends the week at the same point it was... maybe you'll cut your losses

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