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Daily Observations: July 31, 2013

Christopher Vecchio

Current Positions:

- Short AUDUSD (1/2) at net 0.9192, Stop at 0.9170, Target 1 at 0.9045, Target 2 at 0.8960, Target 3 at 0.8770, Target 4 at 0.8545

Closed Positions:

- Short AUDUSD (1/) from net 0.9192 at 0.8960 for +232-pips; full-size position gain of +116-pips

Typical Time Frame: 1-day to 1-week

I took half-profit on my short AUDUSD position today for +232-pips; as it was only half of the full position was taken, +116-pips have been banked. US data was the catalyst to see the AUDUSD trade into 0.8960, and I've added two targets lower at 0.8770 and 0.8545.

Considering that the data this morning was expected to disappoint, the US Dollar is on firmer fundamental footing ahead of the Fed this afternoon, which bodes well; even in the case of a selloff, the dip could be shallow as investors immediately turn to Friday's NFP data for the next clues on monetary policy. I'm looking for further AUDUSD weakness into the end of the week; but I'm willing to resize back to a full position on a bounce into 0.9100/40.

Are you new to FX or curious about your trading IQ?

As always, any other trade ideas and general macroeconomic musings can be found in the DailyFX Real Time News feed, or by following me on Stocktwits/Twitter @CVecchioFX.

I also host a weekly Live Trading Q&A in DailyFX Plus, on Tuesdays at 06:00 EDT / 10:00 GMT, in which I delve deeper into my positions and thought processes behind my analyses.

--- Written by Christopher Vecchio, Currency Analyst

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