My AUD/USD short from yesterday played out exactly as I planned. But I took profit a few pips earlier than I wanted because the bounce from 0.9025 fooled me. As you can see from Figure 1, AUD/USD is resting on 0.9000 support as I predicted. Now the million dollar question is, should I go long in this currency pair because of the super long term trend as I discussed in my previous post? That brown support line in which AUD/USD is resting on now (Fig. 1) extends all the way back to April 2008. However, there's also a nearby support at 0.8945 as shown on Gav's Trading Blog. Since I don't trade such a long term timeframe, I will be more conservative on this by watching how the price reacts in the short term at this 0.9000 level. Gold also broke below 1100 but is holding above its own support around 1080-1090 too. Both markets are finding support at current prices. Let's see how well they last. I am flat in this pair until things are more clear to me. On another note, this isn't exactly a victory as I've been trying to short the Aussie for days. You would have been better flipping a coin in comparison to my success rate lately. I've lost more than I have gained on this move so far. In fact, I am still on handicap mode (half position size) as I'm still in a 3% drawdown as shown in my trading log. However, I am slowly crawling my way out with limited risk and profitable trades such as this.
[caption id="" align="aligncenter" width="580" caption="AUD/USD, 3-hour"][/caption]