The Australian Dollar is well known for acting as a proxy for the energy and metals sectors and can be affected by moves in those relative commodities. While there is no clear evidence of a stronger dollar, the Dollar index continues to remain strong.
When it comes to forex, you will hear lots of economic talk, theory and logic. This “smart” fundamental talk is no different than the hot stock sector stories that make so much “sense”. Our swing trade ideas do not factor in any of this fluff, and measure risk and reward purely from a technical standpoint.
The in the case of the AUDUSD, price has broken an important support in the .7500 area and can reasonably test the .7300s or lower in the coming weeks. This is a play on price momentum more than anything else.
Our style of technical trading is more concerned about the “where” rather than the “why”. We also chose a forex pair instead of a usual stock this week because of the extremely high risk location of the stock market.
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Playing The Dollar Strength.
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Here’s the trade idea:
Sell Limit: .7435
Stop Loss: .7535
Target 1: .7335
Target 2: .7285
Target 3: .7235
This idea utilizes a limit order rather than a stop to enter the market in an attempt to capitalize on intraday price noise. In order to participate with RISK in mind, please make sure to respect the orders, particularly the stop loss. If you are not familiar with order types, or not comfortable with a 100 pip loss, you should NOT trade this idea with real money.
*This is for educational purposes only. Please read our full disclaimer HERE.
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