How to Trade Breakouts – A Simple Forex Breakout Strategy

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TRADING THE AUSSIE DOLLAR’S NEXT BIG MOVE

Since our last blog with a technical chart – How to trade Euro/Yen – Platinum Traders have enjoyed some great profits in the forex market and that particular setup is still in play. All Platinum Traders are sitting on a free trade and at the moment the EUR/YEN is in 110 pips in profit. Patience and discipline always pays off.

We have another week ahead of us and let’s see how Platinum Traders are preparing for the markets. This week we would like to share with you an opportunity we think may be available on the Australian Dollar.

Let’s take advantage of the trends forming in the FX World and flow with the markets to make money.

The Australian Dollar: What Every Forex Trader Needs To Know

FUNDAMENTAL POINT OF VIEW ON AUSSIE:

In its last statement, after leaving the cash rate unchanged, the RBA wrote:

“Conditions in the global economy are continuing to improve. Labour markets have tightened further and above-trend growth is expected in a number of advanced economies, although uncertainties remain. Growth in the Chinese economy is being supported by increased spending on infrastructure and property construction, with the high level of debt continuing to present a medium-term risk. Commodity prices have risen recently, although Australia’s terms of trade are still expected to decline over coming years.

The recent data have been consistent with the Bank’s expectation that growth in the Australian economy will gradually pick up over the coming year. The decline in mining investment will soon run its course. The outlook for non-mining investment has improved recently and reported business conditions are at a high level. Residential construction activity remains at a high level, but little further growth is expected. Retail sales have picked up recently, although slow growth in real wages and high levels of household debt are likely to constrain future growth in spending.”

In the battle to keep its currency down, the RBA chose not to join other Central Banks in the recent trend of increasing overnight rates. Though we have had recent commentaries from Philip Lowe, RBA’s Governor that it would be prudent to assume that the “next rate move will be up rather than down.”

The markets are not expecting a rate hike in October’s meeting though and just like any other central bank Governor, Mr. Lowe will not want to surprise the markets. Therefore, the picture will likely remain unchanged.

With a very weak US Dollar which is showing no signs of a reversal yet, we might be safe enough to rely on the technicals with a strong fundamental bias favouring the Australian Dollar.

TECHNICAL POINT OF VIEW:

WEEKLY VIEW FOR AUSSIE:

From the Daily chart on the right, we can see the AUD/USD has managed to breakout the Ascending Trending Line which had been holding the upside momentum for the last 4 months. The near-term momentum is Bearish for this currency pair. We have an opportunity to join the flow here and short this market @ 0.7965 if we pull back from where we are now which is in confluence with the 50% fib of the last swing high to low. The long-term momentum on Aussie is still Bullish and that’s where Platinum Traders will be waiting to enter this market @ 0.7725 and 0.7635 for another run into the most recent highs of this year. That would be a perfect pullback of the Long-term trend move into the 50% Fib or our Platinum Premium level at the 38.2% fib.

AUD/USD TECHNICAL CHART:

AUDUSDDaily-LTA-Forex Chart-02.10.2017

AUD/USD Forex Trading Strategy

HOW TO TRADE THE AUD/USD:

  1. Long the AUD/USD @ 0.7725 or the nearest zone with 40 pips stop loss and a target of 0.8050
  2. Long the AUD/USD @ 0.7635 or the nearest zone with 40 pips stop loss and a target of 0.8050
  3. Place alerts on the major and minor support areas and match them with the zones and go for 20/20 trades

KEY TECHNICAL LEVELS ON EUR/JPY:

  • 7965 – Short-Term Selling level
  • 7725 – Long-Term Buying Level
  • 7635 – Long-Term Buying Level – Platinum’s Premium Fib level
  • 7515 – Short-Term Buying Level
  • 7330 – Long-Term Buying Level

How to become a profitable Trader.

If you are a new trader and would like to learn how to trade, then sign up today to our 2-day free Foundation to Forex Trading Course. We have just introduced this as in the last month we have had a lot of inquiries on learning how to trade the financial markets. We can get you on the successful path of becoming a Financial Trader.

Hopefully, you have enjoyed today’s article and have gained great knowledge about trading and how to trade.

See you soon!

The Platinum Formula:

Perfect Fundamentals + Perfect Technical Analysis + Perfect Logic + Perfect Risk Management = Perfect Trade

THE PLATINUM WAY

At Platinum, we teach all individuals from different walks of life to become a full-time trader or create a secondary revenue stream by trading part-time. We trade in an Institutional Way by letting the market come to us and being patient. Using Platinum’s Trading system you can take many Pips out of the market. We can ensure using this style of trading your trading will make a turnaround as you will become much more consistent.

If you want to trade like the professionals do, making consistently profitable returns from your trading, get in touch with us and we will demonstrate live exactly how we approach the markets.

Download our free ebook to read about the various Trading Patterns that work in the Financial Market. Watch Trades of the Week Videos in our video gallery. Subscribe to Platinum’s Forex Newsletter.

Hopefully, you have enjoyed today’s article. Thanks for reading!

Have a fantastic day!

Clayton Diniz

Live from the Platinum Trading Floor.

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Earnings Disclaimer:

The information you’ll find in this article is for educational purpose only. We make no promise or guarantee of income or earnings. You have to do some work, use your best judgement and perform due diligence before using the information in this article. Your success is still up to you. Nothing in this article is intended to be professional, legal, financial and/or accounting advice. Always seek competent advice from professionals in these matters. If you break the city or other local laws, we will not be held liable for any damages you incur.