Wooohoooo!!! (USD Weakness)

Well, guys, I am excited! .. How about you?

I am pumped because the USD weakness has provided some great profit in current trades AND some great potential for future trades.

First, let’s quickly touch base on the USD/CAD short I discussed in yesterday’s analysis HERE.

As you may have noticed, the USD/CAD has followed through exactly as we’d hoped. For a pair that doesn’t tend to move a whole lot, this thing looks like it just got dropped from a plane 30,000 feet up:

USD_CAD_current

 

I got slightly more aggressive with my entry due to the beautiful test and continuation (Boomerang Formation) that we got just after I posted my article, but the entry was just a few pips different and of no major consequence.

You may also notice that I have already moved my stop to reduce risk. At this point, there is no sense leaving my stop all the way at the top of the channel since we have clear confirmation that Bearish continuation has occurred.

In other words, the only way price is going back through the channel at this point is on a legitimate reversal and I don’t want to be in the trade if that happens anyway.

*Note that I did not move my stop to break-even. A common error is that traders move their stop to break-even when there is no technical reason to do so. Instead, move your stop to a place where it is hiding behind a level of support or resistance so it’s not a sitting duck for the market.

My Target is still a long ways off as mentioned in my last article, but I will be trailing the stop at new highs/lows as the trade progresses… So are YOU in this trade? Let me know.

That’s it for the update on the USD/CAD … Now to the OPPORTUNITY TRADE.

AUD/USD: Daily Strike (HUGE Target)

The AUD/USD has been consistently moving upward for 700 pips year to date. Each pull back brings a new high so far.

AUD_USD_DAILY_MAY_6_1

 

 

Not only do we have a consistent trend building that we can look to jump on (not too early, not too late) but the BEST part of this trade idea is that it is moving right back toward last year’s high which is about 400 pips away.

That means we can enter now on the DAILY STRIKE:

aud_usd_may_6_2

 

But rather than just targeting the most recent high in the uptrend, we can set our eyes on the 2013 High:

aud_usd_may_6_3

 

In order to take advantage of the 400 Pips available, I will be setting a Pending Buy Order and hoping for a retrace or centering of this powerful Daily Bar. That way, I can join in at a better price and get the optimal Risk to Reward ratio:

aud_usd_may_6_5

 

Of course, there is the chance that we won’t be able to get into this trade due to a pending order. But if we are able to get into the trade, I feel that the USD weakness has a high probability of showing continuation and getting us into profit. A full profit should be about a 4:1 R/R as well!

For me, this trade is worth the Risk.

 

 

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NathanTucci

Nathan Tucci has been with Winner's Edge since 2011 as a writer and trader. He specializes in strategy development and enhancement and loves to share what he learns from testing, research and real world experience.
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  • Olga

    Hello guys, i checked out CFI markets-i did download a demo account. There are no swaps, no minimum deposit, they are licenced by Cysec, STP/ECN broker and spreads on EUR/USD is 1.7! Any comments?

  • http://jbmaverick.wordpress.com/ Jack Maverick

    Clement – Sorry I didn’t have a better forecast for you.

  • Clement

    Thanks Jack.

  • http://jbmaverick.wordpress.com/ Jack Maverick

    Thanks, Dustin, we’re happy to help whenever we can, and definitely appreciate it when someone lets us know that we’ve been helpful..
    I’m glad you were able to un-clutter your charts.
    And if you liked “woohoo”, you’re going to love it when Chris explains the “kangaroo punch”.

  • Dustin Rogers

    You and me both Jack.
    Woohoo;)
    I’m so glad I found Winners Edge, you boys pulled me and my trading out of a heap of indicators, and trash… I now truly enjoy a fresh and clean chart I can lay down what I see.
    The analysis is the icing.

  • http://jbmaverick.wordpress.com/ Jack Maverick

    What I love is the truly professional market analysis we offer here at Winners Edge – “Woohoo!” :)

  • http://jbmaverick.wordpress.com/ Jack Maverick

    “my greatest worry is EurAud: I’m long on it at 1.5002 Any suggestions?”
    Get out now? Seriously, I think that may have been a decisive rejection of the 1.5000 level up there, and then again today at 1.4950. I wouldn’t ride it much longer unless I saw some real encouragement – below 1.4850, likely heads on down toward 1.4650.
    Also, just looking at this in the immediate near term, doesn’t look good if we continue this up move, as Aud/Usd has a lot further to run before encountering major resistance (.9450 – .9500) than Eur/Usd does (1.4000).
    That’s just my take on it – perhaps Nathan has something more enlightening to offer.

  • Dustin Rogers

    Usd/Cad “wooohoooo” is spot on I went in at 09528

  • Clement

    Thanks Nathan. I’ve expected this up move for some days now; I’ve been long in the AudUsd. I also went aggressive on UsdCad, but exited at 1.08977(+55 pip). But, my greatest worry is EurAud: I’m long on it at 1.5002. Any suggestion?

  • http://jbmaverick.wordpress.com/ Jack Maverick

    It’s funny – I think Gbp is almost “strong” by default. It’s not that the UK doesn’t have a slew of economic problems – It’s just that they’re much smaller RELATIVELY, in comparison to the U.S. or the Eurozone.

  • http://jbmaverick.wordpress.com/ Jack Maverick

    Nathan – Totally with you on the Aud/Usd. And yes, thank GOD we finally had more than a 30 pip range for the day! I held long Aud/Jpy overnight yesterday, and got about half of the move up in Aud/Usd today. Wish I’d caught the moonshot in Gbp/Usd.
    One caveat – I’m not so sure that Eur/Usd participates in this long term – I think Gbp and Aud may leave it behind in the near future as they continue upward. Just a thought.

  • HB

    The last time I followed this trade, it wasn’t very good, I lost out. I hope this time will be fruitful, as I am a bit skeptical after the last episode. I do realise not all trades are 100 percent accurate, but when you are on a limited budget – it hurts . I do check in with you guys all the time, and keep my eyes open. Thanks it s a great learning curve.