We are in week 34 of 2018. This week’s post shall be short and sweet.
Before any continuation, do remember to read the disclaimer.
Starting with US index (DXY), after a break up, most of the traders may have longed it upon break up and there is where most traps are laid.
From the weekly chart, we can easily see the movement changing tone in week 33. At the current support, we have taken some profit off the table from shorting the usd. Remaining to be seen if the support or break up is real, we have 2 scenario to play this.
The first scenario will be to look to long this usd if h4 timeframe shows some bullish candle while the second scenario will be to continue to short this usd until the swing back shows up in the chart.
Looking at this, we see possible rebound for AUDUSD and USDCAD
AUDUSD – it is remained to be seen if the monthly and yearly support around 0.716 zone can be broken. So far based on historical movements, we can see that 0.7 – 0.716 zone is a very sticky zone and always defended rather well. I have personally likened this trade for the longest time as it seems to be a no brainer to long this and TP later as it goes higher to 0.8 zone ( then again this takes time to swing if it really materialise). But for a start, if the USD break up is a fake, we should be able to see AUDUSD move up alot higher.
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RISKS ASSOCIATED WITH FOREX TRADING
Trading foreign currencies can be a challenging and potentially profitable opportunity for investors. However, before deciding to participate in the Forex market, you should carefully consider your investment objectives, level of experience, and risk appetite. Most importantly, do not invest money you cannot afford to lose.
There is considerable exposure to risk in any foreign exchange transaction. Any transaction involving currencies involves risks including, but not limited to, the potential for changing political and/or economic conditions that may substantially affect the price or liquidity of a currency. Investments in foreign exchange speculation may also be susceptible to sharp rises and falls as the relevant market values fluctuate. The leveraged nature of Forex trading means that any market movement will have an equally proportional effect on your deposited funds. This may work against you as well as for you. Not only may investors get back less than they invested, but in the case of higher risk strategies, investors may lose the entirety of their investment. It is for this reason that when speculating in such markets it is advisable to use only risk capital.
Risk Disclaimer for Forex Trading
Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. Past performance is not indicative of future results. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.