Looking To Put On Some Pounds


THE LIGHTER SIDE - I am feeling very light today. I cut out all my positions for a nice profit overall and am now only sitting on the AUDNZD long from 1.0514. As you all know, AUDNZD is my trade of the year, so I won't be letting go of this one any time soon. At the time of writing this update, the RBA has not come out with its decision. I am not going to say that I think they will cut or stay on hold. But what I will say, is that there is sure to be some volatility and opportunity whatever the result. If the RBA decides to cut rates, AUDNZD is likely to sell off and this will open the door for a chance to build into the existing long position. If on the other hand the RBA leaves rates on hold, AUDNZD will push higher and my attention will shift to AUDUSD, where I think there will be a nice shot at looking to fade the rally. So either way, there will be a potential trade.

A MONSTER TRADE - Now you may ask - If I'm looking to buy AUDNZD why would I be looking to sell AUDUSD? Well, I don't like the outlook for the Australian Dollar against the US Dollar or some of the other major currencies right now, but I do believe there is room for Aussie to outperform against its commodity currency cousin. AUDNZD recently broke to a fresh record low, and is now recovering out from a 1.0500 area that historically has done a good job of supporting, even taking into account the brief stint below 1.0500 several weeks back. Back to my other trades. I said EURCHF was the new best trade of 2015 when I bought at 0.9860, and it was! I didn't expect the market would show such amazing follow through so quickly. I knew it was a possibility, but I suppose I have learned to never get too excited in this business. And so, when we broke up to 1.0580 on Monday, I decided to exit the position. This trade had very little pain and a 720 point reward. I think it will be very hard to beat that this year. Even if AUDNZD exceeds this move, which I expect it will, it will take much longer for this position to play out. So I am very light right now and looking to put on some weight. Where that next trade comes from, I'm not sure just yet. But I am excited to find out.

It was the trade of the year and it only took a couple of weeks to play out. Via @joelkruger

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