Jump to content

Trade of the Week starting 20 June: long AUD/USD

Recommended Posts

In this week’s Trade of the Week, IG's chief market analyst, Chris Beauchamp, looks to go long AUD/USD with a stop-loss at $0.6840 and an upside target at $0.7250. He also looks at last week’s trade, which was short gold.


 Chris Beauchamp | Chief Market Analyst, London | Publication date: Monday 20 June 2022 


Hello, and welcome to IG's Trade of the Week for the week beginning Monday 20th June.

Each week we look at a key market to trade and a potential trade and risk management around that price action.

Short gold

But first, we look back to last week for the trade beginning Monday 13th June. In this, Axel Rudolph looked at going short gold with a stop at $1,878.

Initially this worked out beautifully, because Monday you had this huge drop in gold down around 2.7% for the day. And that followed through into the Tuesday. So it seemed to be working out very nicely.

But then you had a rebound in the middle of the week, which then stalled on Friday. So I suppose honours even for buyers and sellers last week.

But as the new week begins, gold appears to be weakening once again, dropping back below the 200-day moving average below $1,840. So this one is still really intact and certainly is nowhere near the stop-loss at $1,878 for the time being, so maybe one just to let run and see whether it works.

Obviously if it gets back towards $1,860, $1,865 maybe we'll start to feel a bit more nervous. But for the moment, gold looks to be running out of steam, potentially validating that short trade idea.

Trade of the Week: long AUD/USD

Moving to this week, it looks like we might have the makings of some kind of risk rebound.

Of course we said that before, but if you're looking at a number of currency pairs and indices markets, maybe they have found a short-term low now that all the excitement around the Federal Reserve, etc. is perhaps out of the way for the time being.

So while, in the context of a longer-term risk-off move, perhaps it's time for the pendulum just to shift back again in the short-term. So perhaps one way to look at that will be AUD/USD, which has begun to recover actually after its sharp declines in the first couple of weeks of June.

We went from about $0.7250 against the US dollar down to $0.6850. But since then we have recovered and so we're looking to go long the Aussie dollar against the US dollar for this week.

At the moment you're seeing it pressing back towards the $0.70 mark. You've had a higher low perhaps carved out here between Friday and into Monday's session, so that's an encouraging sign as well.

So the idea here is we look to go long the AUD/USD with expectations perhaps of initial upside towards that June high towards $0.7250 US cents, for this one. And then in terms of our stop-loss, we're going to put this one below the 14th June low, which was at $06850, bang on $0.6850, so put it down at $0.6840 on this one, just a little bit more room below that one, just in case you get some volatility around that $0.6850 level. And if it drops back to there then clearly the exposition for further upside will have been negated.

So that's long AUD/USD for the week beginning Monday 20th June with our stop at $0.6840.



trade of the week.PNG

Link to comment

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
  • General Statistics

    • Total Topics
    • Total Posts
    • Total Members
    • Most Online
      10/06/21 10:53

    Newest Member
    Joined 06/02/23 21:35
  • Posts

    • Look Ahead to 07/02/23: RBA; GB Retail Sales; BP, BNPP earnings Australia’s central bank is likely to deliver a fourth consecutive quarter-point interest rate hike, after further tightening by the Fed, the ECB and the BoE. Brace for UK retail, earnings from BP (BP) and BNP Paribas (BNPP). Also, look out for US trade balance figures and Halifax house price data ahead of key UK growth data out later in the week.    Angeline Ong | Presenter, Analyst and Content Editor, London | Publication date: Monday 06 February 2023        
    • Hi, I am practicing certain strategies in demo account. I have created few screeners but when i tried to buy or short sell different stocks shortlisted based on screener conditions, i am getting different kinds of errors. Some stocks you can buy but can't short-sell and so on. I searched in the forums and i understand different restrictions such as market cap should be so and so. Are these rules defined somewhere?  for e.g. one forum reply says market cap should be above 10 billion otherwise you will get second message in below list. However even i try to short sell a stock that has £30 billion market cap, i get the same error.  1. IG is not accepting opening trades on this market, you may only place an order to close. 2. Market you have requested is not longer available online Any suggestions on the above will be greatly appreciated. Thank you.
    • Charting the Markets - February 6, 2023 FTSE 100, DAX and S&P 500 tiptoe lower following strong US jobs report. EUR/USD and GBP/USD are topping out while EUR/GBP rallies. And gold, Brent crude, and natural gas head lower, as payrolls strengthen the dollar.                         This is here for you to catch up but if you have any ideas on markets or events you want us to relay to the TV team we’re more than happy to.
  • Create New...