AUDUSD Technical Analysis 2014, 10.08 - 17.08: Ranging Bearish - page 2
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Press review
newdigital, 2014.08.14 17:51
AUDUSD Trading Range Update (adapted from dailyfx article)
Forum on trading, automated trading systems and testing trading strategies
Press review
newdigital, 2014.08.15 10:01
Trading the News: UoM Consumer Sentiment (adapted from dailyfx article)
A rebound in the U. of Michigan Confidence survey may generate a bullish reaction in the U.S. dollar (bearish EUR/USD) as it raises the outlook for growth and inflation.
What’s Expected:
Why Is This Event Important:
A pickup in household sentiment may spur a larger dissent within the Federal Open Market Committee (FOMC) as central bank officials look for a stronger recovery in the second-half of the year, and the Fed may show a greater willingness to normalize monetary policy sooner rather than later as the committee turns increasingly confident in achieving the dual mandate for full-employment & price stability.
Higher wage growth paired with marked rebound in 2Q GDP may prop up household confidence, and an upbeat U. of Michigan print may heighten the bullish sentiment surrounding the U.S. dollar as the Fed looks to move away from its easing cycle later this year.
However, the slowdown in private sector credit along with the recent weakness in household consumption may warn of a further decline in consumer sentiment, and another unexpected decline in the confidence survey may trigger a near-term correction in the greenback as it drags on interest rate expectations.
How To Trade This Event Risk
Bullish USD Trade: U. of Michigan Survey Climbs to 82.5 or Higher
- Need to see red, five-minute candle following the release to consider a short trade on EURUSD
- If market reaction favors a long dollar trade, sell EURUSD with two separate position
- Set stop at the near-by swing high/reasonable distance from entry; look for at least 1:1 risk-to-reward
- Move stop to entry on remaining position once initial target is hit; set reasonable limit
Bearish USD Trade: Consumer Sentiment Continues to Disappoint- Need green, five-minute candle to favor a long EURUSD trade
- Implement same setup as the bullish dollar trade, just in the opposite direction
Potential Price Targets For The ReleaseEURUSD Daily
- Will continue to look for string of lower-highs as descending triangle takes shape.
- Interim Resistance: 1.3650 (78.6% expansion) to 1.3670 (61.8% retracement)
- Interim Support: 1.3490 (50.0% retracement to 1.3500 Pivot
Impact that the U. of Michigan Confidence has had on EUR/USD during the last release(1 Hour post event )
(End of Day post event)
2014
The U. of Michigan Confidence survey unexpectedly weakened in July, with the index slipping to 81.3 from 82.5 the month prior, while 12-month inflation expectations climbed to an annualized 3.3% from 3.1% in June. Nevertheless, the greenback struggled to hold its ground following the dismal confidence report, with the EURUSD trading back above the 1.3500 handle, and the reserve currency continued to trade heavy throughout the North American trade as the pair ended the day at 1.3521.
MetaTrader Trading Platform Screenshots
AUDUSD, M5, 2014.08.15
MetaQuotes Software Corp., MetaTrader 5, Demo
AUDUSD M5 : 6 pips price movement by USD - UoM Consumer Sentiment news event