Trade of the week: long AUD/USD

(Partial video transcript)

This week's trading opportunity

Hello and welcome to this week's "Trade of the week", which is to go long AUD/USD.

First of all, for technical reasons, as you can see on the chart in the video, we're breaking out of an ascending triangle. So as you can see on the chart, we've got a sloping, a downward sloping, upper triangle resistance line, and we've broken above that. And we've got a horizontal support line here. So this is why it's called an ascending triangle.

We've broken out of that. That is bullish. And since we had a move upwards into this triangle, we would expect a similar move out of that triangle to the upside to be seen in the future. And also, if you look at the Australian dollar, it is closely linked to the gold price. And now that the gold price is trading back around the $5000 per troy ounce mark, from a fundamental point of view, it might also make sense to buy AUD/USD.

So what I would like to do here is wait for a retracement back to the breached upper triangle resistance line here, which is now a support line, and do so, so that we can basically buy, or go long AUD/USD at around $0.6995 with a stop-loss at $0.6895, so just below Friday's low, and an upside target around $0.7145. Why there? Because if I go on the weekly chart, you can see we've had previous highs from August 2022 and from January 2023, which come in around $0.7150.

So this week's "Trade of the week" is to go long AUD/USD, and to do so on a slight retracement low at $0.6995 with the stop-loss at $0.6895 and an upside target at $0.7145. 

Previous trading outcome

Now last week, unfortunately, Chris Beauchamp got really unlucky. He went long the DAX 40, the German stock index. He did so here on Monday and it looked really, really promising. We had a nice rally and then on Tuesday that continued. But then we reverted back down to the downside and, unfortunately, we fell three points below Monday's low on Friday of last week.

So Chris’s trade was stopped out just marginally before we headed back up again. But that sometimes happens. And so far we've had a pretty bad start to the year, to be quite honest with you. We are down around 3.6%. We had three losing trades, one winning trade. But then again, last year I think we had five losing trades in a row at the beginning of the year. And we still ended the year on over plus-20% return because we only risk 2% of capital per trade. And we're going to do the same on this week's AUD/USD trade.