News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
EUR/USD
Bullish
Oil - US Crude
Mixed
Wall Street
Bearish
Gold
Mixed
GBP/USD
Mixed
USD/JPY
Mixed
More View more
Real Time News
  • Perhaps I'm a bit shell-shocked by the disappointing response from data over the past few weeks (Fed, GDP, NFPs) such that I'm dubious of a 'risk' response to CPI. However, $VIX closed at a two month high this past session https://t.co/jXoajxNjX9
  • The volatility of the first 48 hours of this trading week which has rocked the Nasdaq 100 and other risk measures has drawn blame around inflation. Well, the CPI data is up and the Dollar is ready: https://www.dailyfx.com/forex/video/daily_news_report/2021/05/12/Dollar-Prepared-for-Nasdaq-Volatility-if-Inflation-Data-Can-Stir-Interest.html?ref-author=Kicklighter&QPID=917719&CHID=9 https://t.co/xSR7ThfMAM
  • (Sentiment Weekly) Dow Jones, S&P 500 Outlook: Rising Long Bets, Bearish Technical Signs Worrying Recording of today's webinar also in the article below #DowJones #SP500 https://www.dailyfx.com/forex/technical/article/special_report/2021/05/12/Dow-Jones-SP-500-Outlook-Rising-Long-Bets-Bearish-Technical-Signs-Worrying.html?CHID=9&QPID=917702&utm_source=Twitter&utm_medium=Dubrovsky&utm_campaign=twr https://t.co/3CEmvEwmnv
  • Did you know a Doji candlestick signals market indecision and the potential for a change in direction. What are the top five types of Doji candlesticks? Find out https://t.co/c51s3IBcEu https://t.co/lLNE9eI4NT
  • Commodities Update: As of 02:00, these are your best and worst performers based on the London trading schedule: Oil - US Crude: 0.10% Gold: -0.38% Silver: -0.81% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/D02uNrtXBx
  • RT @tracyalloway: Yields on the junkiest of junk bonds (CCC-rated) hit another all-time low, coming in at just 5.66%. https://t.co/qGi3ETjG…
  • RT @FxWestwater: Euro Technical Forecast: $EURUSD, $EURAUD, $EURJPY Charts to Watch Link: https://www.dailyfx.com/forex/market_alert/2021/05/12/Euro-Technical-Forecast-EURUSD-EURNZD-EURAUD-Charts-to-Watch.html?CHID=9&QPID=917708&utm_source=Twitter&utm_medium=Westwater&utm_campaign=twr https://t.co/fa6WSjjYpM
  • Forex Update: As of 02:00, these are your best and worst performers based on the London trading schedule: 🇨🇦CAD: -0.08% 🇪🇺EUR: -0.10% 🇨🇭CHF: -0.13% 🇯🇵JPY: -0.20% 🇳🇿NZD: -0.31% 🇦🇺AUD: -0.32% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/d3C8KTv536
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Silver are long at 89.21%, while traders in GBP/USD are at opposite extremes with 68.58%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/shh3jAwo7Z
  • 🇦🇺 Building Permits MoM Final (MAR) Actual: 17.4% Expected: 17.4% Previous: 20.1% https://www.dailyfx.com/economic-calendar#2021-05-12
Agility is Critical Even for Long-Term Traders

Agility is Critical Even for Long-Term Traders

Ilya Spivak, Currency Strategist,

Talking Points

-AUDUSD fundamental case for a counter trend trade

-Framing a trade using Fundamentals and entering using Technicals

-Be quick in identifying market sentiment

In April, the Australian Dollar found itself in a perfect storm of negativity. On the home front, a sharp downward revision in Chinese economic growth expectations spilled over into fears of lost export demand and weighed on RBA policy bets. On the global side of the equation, the Federal Reserve began to introduce the concept of “tapering” its QE asset purchases, driving liquidation across the risky asset spectrum. By mid-May, the Aussie lost its grip on parity with the US Dollar. By August, it was trading below the USD 0.90 mark at levels unseen in three years.

Around this time, I began to think the move was over-stretched and vulnerable to a correction. After a heavy surge, the weekly build in speculative net-short AUD positions began to slow. A string of better-than-expected Chinese economic news releases arrested the slide in growth expectations. Fed officials were doing their utmost to talk down the volatility they themselves unleashed. Simply put, the Aussie looked to be running out of fresh bad news, and it seemed only a matter of time before profit-taking would begin to sweep the trade.

A bullish Piercing Line candlestick pattern on the weekly chart offered the technical trigger to put this fundamental view in motion and I entered long at 0.9189. After bumping along the bottom for a few weeks, the Aussie launched an impressive rally, reversing half of its losses by mid-October. Throughout this time, I maintained that the overall AUD/USD trend was bearish and the long trade purely tactical, aiming to take advantage of a bounce before reverting to the short side. When the time came to switch sides arrived however, the plan unraveled.

Agility_is_Critical_Even_for_Long-Term_Traders_body_Picture_1.png, Agility is Critical Even for Long-Term Traders

I booked profits on the trade at 0.9463 as the pair began to turn and a week later noted the bearish reversal chart setup that would ultimately mark down trend resumption. However, I was simply not mentally prepared to jump in short. The long position from August took weeks of research and fine-tuning. This shaped a stark world view that became difficult to swiftly abandon because of the sheer time spent formulating it. I remained on the sidelines and watched as the Aussie resumed dropping, returning to Augusts’ lows by year-end.

The lesson to be had here is straight-forward: agility is critical even for long-term traders.

Written by Ilya Spivak, Currency Strategist for DailyFX.com

Follow and contact Ilya via Twitter: http://twitter.com/IlyaSpivak

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES