AUD/USD and AUD/JPY Trade Update - Bulls Win with Announcement of "QE Infinity"

With the announcement of the United States Federal Reserve announcing QE3 (link to bloomberg.com) with a pledge to continue asset purchases until the US economy improves, the USD has lost quite a bit of value in the course of a single trading day. My estimate, looking at my quote sheet is about 1 - 1.5 cents against everything so far.

I have a couple of trades on AUD/USD and AUD/JPY, long on both, prior to the FOMC meeting and press conferences, doing fairly well on average. After the announcement, it was quite a fight but both pairs have put in some impressive highs for the week, and the corrections (thus far) seem to be muted.

I am currently waiting on both of these positions to see if they have the potential to reach my first targets of 1.06 on AUD/USD and 82.00 on AUD/JPY, though I may have to wait to see what the Asian Session brings.

AUD Looking Poised for Another Climb

AUD/USD and AUD/JPY both look poised for additional gains, based on my study of these charts. I'm looking at the 15 minute on both.

I'm already long on both, as both carry trades and with profit targets of 1.06/07 on AUD/USD and 82.00/83.00 on AUD/JPY. Thursday and Friday should be interesting to see how they play out.

AUD bad data (Trade Balance) but a muted negative response

The trade balance released by the Australian Bureau of Statistics is the difference in the value of its imports and exports of Australian goods. Export data can give an important reflection of Australian growth, while imports provide an indication of domestic demand. Trade Balance gives an early indication of the net export performance. If a steady demand in exchange for Australian exports is seen, that would turn into a positive growth in the trade balance, and that should be positive for the AUD.

-556M Actual > -300M Consensus > 9M Previous

This is where I get a bit scared, so trade balance is down, down by more than anticipated, and the result is that the AUD/USD and AUD/JPY both dipped but are now showing stability. When this happens, I start to think either technical analysis is winning over fundamental analysis or that something is rotten in Denmark. Mind you, I'm hoping both pairs go up but I can't figure out why.

AUD/USD Update

Interesting to see a partial confirmation of my earlier Analysis. Hopefully going much much higher in the next day or so.

Immediate target of 1.0450ish area, and if this resistance zone is broken with sufficient strength, I'm confirmed for a move to at least the 1.0520 highs of last week, and depending, a break higher on that range to 1.06 / 1.07 area.

AUD/USD, 240 Min Chart, Yet Another Perspective

Continuing from my last few posts on this trade, this new snapshot from my charts should speak for itself. This is why everyone should look at multiple time-frames for any trade they are about to take or any trade they are into.

It looks as though price is on the way from swing low to swing high. The next few hours/days will confirm or deny. Yet another perspective, the 5-minute chart drills down to the essence of the action in the Asia session:

It also shows some short term resistance levels against price moving higher.

AUD/USD Update Downtrend Appears Confirmed but...

The Downtrend seems quite evident now on this pair, but it appears as though the low of the trend is in place for the time being. The long position may still have some validity, based on a possible upward move in the channel drawn on an hourly chart here:

A more conservative target of 1.0480 to 1.0490 might be possible, but it probably will not happen during this trading week. I would keep a stop below 1.0380 for the day and possibly even lower for the weekend if I were in a long position. While this might be a mistake, and it does violate a trading rule held by many traders, conditions are dynamic and can often change at a moment's notice. I am of the opinion that adjusting stops can be done within reason if conditions keep your goal within reach and the additional loss is not beyond your tolerance. There is no reward without risk.

AUD/USD Rectangle on the 60 Minute Chart

Although I have read a few reports and seen that the AUD/USD could be forming a new downtrend, it has yet to be confirmed from my perspective.

Looking at this 60-minute chart, it could make sense to buy in the demand area of 1.0420 - 1.0450 on the possibility that the AUD/USD will return to 1.05/1.06 in the next week. Either of these are good targets, depending on which way the market and sentiment moves.

On this 240-minute chart, there may also be support found in the 1.0350, the 0.250 Fibonacci from the June 1st Lows (0.9580) up to the August 9th highs (1.0613), and a 200 hour SMA found at 1.0380. Depending on what happens, this could even be a sell signal from present price of 1.440 down to this area.

Then again, it is Friday, and who knows what will happen on the weekend, so I may just close what I have in the next few hours and call it a week.