We called the short scenario and mapped out the trade, but passed anyway. Why? The explanation can be found in other markets. Equity markets on Monday showed major indecision and no conviction. The Shanghai Composite , which has been a major driver for the Aussie, was flat on Monday and the US was expecting some news.
During uncertain times without market direction, you often get significant spikes out of nowhere. Although the short AUDUSD looked great, it wasn't worth the risk. Compare it to the USD/CAD short and USD/JPY long trade and you'll see the difference in quality - we link the setup in the ideas below.
The short moved right back into the 0.694 area where it found support. The Aussie is now a neutral chart and does not give any clues or offers scenarios. As we said on the DAX idea, it's a pass today.
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