Free Profitable Forex Newsletter
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Fundamentals continue to favour higher AUDNZD
Since the outbreak of the Russia-Ukraine war, AUDNZD has appreciated by around 800 pips, driven by a notable “commodity advantage” for Australia over New Zealand. Namely, Australia is a major exporter of gas and metal commodities (where supply is most disrupted due to sanctions on Russia), while New Zealand has no
exports in these commodities. This is a clear divergence created by the current situation in Ukraine, and won’t go away until the full crisis resolves. Thus, these large-scale factors can continue to push AUDNZD further higher and looking to join this trend via a long AUDNZD position still makes
sense.
Technicals show a continuation pattern
As can be seen on the daily chart shown below, AUDNZD is rebounding this week at the 1.1250 zone, following a correction down from the September high at 1.1489. The trend is clearly bullish and well-defined by an ascending channel formation and trend indicators like, e.g., long-term moving averages (50, 100
DMAs). The rebound at 1.1250 yesterday also represents a continuation pattern within the trend. It is a retest of the previous swing high (now support). This is a common pattern within long long-lasting and is usually a good entry point to join the trend.
If the bounce from 1.1250 extends into a new bullish leg, then AUDNZD should soon reach the 1.15 zone (our 1st target). On the other hand, a possible scenario is also for AUDNZD to make another attempt to the downside, at the 1.1250 zone, or perhaps even deeper.
In this case, it would provide better levels to establish long positions, and any dips toward 1.1250 or lower should remain good buying opportunities. The bullish trend will remain firmly intact as long as AUDNZD stays above 1.11. And that is quite a
distant level at the moment, meaning the bullish momentum here remains strong.
Entry: - Preferably, look to enter long closer to the 1.1250 zone if possible;
- Current levels around 1.1350 would also be OK for
entries
Stop loss: - AUDNZD should not dip below the 1.1250 support sustainably, though brief occasions are possible. In fact, a brief correction even to the 1.1150 or 1.1100 zone wouldn’t break the uptrend here
- So placing the stop below 1.1250 is a good approach, though there are risks that brief tests below are possible, which could trigger stops or cause some traders to close their positions
Targets: - 1st: the 1.15 zone
- Longer-term: we can use a trailing stop and play the trend for larger gains
Trade signals from the past weeks
- September 9, 2022 - Short EURUSD from 1.0050, 1st target at 0.98 reached for +250 pips, in progress toward 2nd target at 0.95 (trade idea sent Sep 2)
- September 30, 2022 - Short GBPUSD from 1.1160, stop triggered at 1.13 = - 140 pips
TOTAL P/L in the past week: -140 pips TOTAL: +6855 pips profit since October 1, 2018
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Any opinions, news, research, predictions, analyses, prices or other information contained in this newsletter is provided as general market commentary and does not constitute investment advice. FX Trading Revolution will not accept liability for any loss or damage including, without limitation, to any loss of profit which may arise directly or indirectly from use of or reliance on such information.
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