In the minutes before the ADP employment report AUDUSD broke from a 4th wave triangle and is rallying into a 7-level Fib resistance zone of 0.9170-0.9200 in wave 5. I issued a sell signal on Twitter into the AUDUSD 0.9200 level that we have been tracking for several days now. The ADP numbers just came out at 42k, slightly above the 39k consensus. Hopefully Aussie will rally and trigger our 0.9180 and 0.9200 sell levels and then become a good example of how you can safely trade the news.
I like to come into an economic data point with a particular trade zone that I have been focused on many hours before the event. Then, if the market is a safe distance from that particular trade zone, in this case 40 pips away in Aussie, I will have limits in place to capture the over reaction to the data. Keep in mind the dollar has sold off for 8 of the past 9 trading sessions and those short dollar positions will be looking to possibly take some profit ahead of Friday's NFP numbers, regardless of the strength of the economic data point.
Due to the recent thin summer trading conditions, I am much more likely to move out of this trade more quickly than I normally would. If you participate in the trade I will do my best to update here, but please sign up and follow www.twitter.com/toddgordontrade for full position management details
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