AUD/USD Selling Opportunity

Good Evening Traders,

I am placing an order to go short with the AUD against the USD. This is counter trend, but I think the AUD is seeing the end of it's long climb, and I see strong evidence that a significant fall is eminant. Details of specific entry and exit points, and the factors involved in the alert are detailed below. Happy trading.

Recommendation:
Sell 1 unit AUD/USD at 90.30, Stop Loss at 92.25, Take Profit at 87.50
Sell 1 unit AUD/USD at 91.20, Stop Loss at 92.25, Take Profit at 84.50

Commentary:
The story for the past several months has been to go long with the AUD against almost every currency. It seemed the AUD could do no wrong and conditions were picture perfect for a climb that just didn't seem to want to end.

But the picture likely changing. China is tightening their monetary belt, South Korea had a slower than expected growth in Q4, and there are fears that the projected increases in Asian demand may be overly optimistic. Furthermore, on February 2nd, the RBA is expected to raise rates from 3.75% to 4.00% before sitting on the sidelines for several months at a minimum. Recently, the strength of the overall global recovery has been called into question given the slow 4Q growth reported in Germany. The domino effect is already begun: The slower global growth is affecting commodity demand, there is a retrenchment in stocks, and the once broad 'risk-on' trade is waning, and to top it all off, speculative long AUD positions are at their highest levels in nearly 2 years.

The technical picture only confirms a tumble in the AUD. A long-term double-top is in place at 93.00/95.50, price is currently below most of the key daily moving averages, and is below the Ichimoku cloud, and the Tenkan line is poised to cross down below the Kijun line. All of these things combined constitute a strong "sell" signal.

I am expecting some volitility surrounding the RBA rate decision. I am looking for the price to be driven up to our entry price prior to the rate decision announcement, or during the fall-out. Should that fail, I will look for other possible entry points.

From the Desk of
Aaron Reid
BDI PowerGroup
Forex Insider