Lots of action for the first half of this week. I would like to follow-up on my trading plan created on the weekend for the week ahead.
Recall from last week, I said I was bullish on the Australian Dollar while bearish on the New Zealand Dollar. Both of them priced against the U.S. Dollar, it’s a bit of a surprise that I’m not trading against myself. Keep in mind that this is short-term and my sentiments will change when I believe it is time to reverse my positions. I thought I would provide a quick recap of my trades (already closed out NZDUSD and reversed AUDUSD).
I was able to close my long position at the very peak after seeing the Australian Dollar struggling to break about the 0.769~ zone. Unfortunately, I did not enter short immediately and resumed my short trade early tonight hoping to catch the second leg of this move provided that there will be a lack of outstanding bids.
Despite being bearish on the New Zealand Dollar over on the daily time frame, I take my trades in intra-day time frames favoring trading in legs rather than taking on a positional trade of sell and hold in this case. I got out of this position rather early when I sensed volatility was drying up.
Based on the current movement, I expect prices can retrace back up to the 0.7215~ level before I begin another round of short entries. Looking at the conditions, there isn’t much outstanding orders shown by the choppiness in the prices. Once the Sydney session opens, we can expect a decent amount of short sellers to cover their positions.