The AUD/USD had formed an obvious channel topping out around .8645 which is the level I posted would be a key level to break and the botton of .8550 which was our next add level that I posted a few days ago. I have received reports of profits from traders playing the range getting in around our add level and taking profits at the .8640 area.
Its good that many of you are identifying on your own how these channels can form and hold. I personally don’t care for trading the daily noise; however, there are good opportunites available when a channel like this becomes apparent. My only advice would be to maintain a portion of your position thru the swing as you would hate to miss the break that could run back to 8700 possibly even 8800.
A good approach is to hold the better positions i.e. the positions you took on the bottom and take profit on the postions that are not as good. This way you can create a situation where the majority of your entries are at the bottom of the range thus decreasing risk.
I am personally holding all my positions thru the swings so that when it goes to profit I will take profit on all the positions. Either strategy will work just understand that the mechanics of each strategy vary. Neither one is better than the other it is more about what you are comfortable and confident with. Personally I am comfortable with both however one requires more screen time.
So for now we have seen yet another opportunity for buyers however as we see a level of resistance get struck over and over again that level can weaken and eventually be broken so if you continue to buy at .8550 area be aware that we could still see a break down to the .8530 level that I discussed on my previous post. All this to say be cautious and leverage yourself accordingly. Still looking for the AUD/USD to go to at least .8680. However, as Jonathan mentioned we are going into the holidays so we will likely see diminished volume. Keep an eye out for updates.
Dustin
