AUD Powerhouse Plays

GM. Rise and shine, traders!

Welcome to Currencies & Coffee, where we blend the finest market ingredients to serve you a fresh trading treat every morning.

Here’s what we have covered today:

☕Global PMI Woes and Central Bank Moves!

☕Unleash the Magic of the Mind's Eye

☕ A+ Lesson In Adaptive Risk Management

🗞️ Movers & Shakers 🗞️

We had an eventful week in the market last week; here's a recap of all the action:

• Disappointing Global PMI Readings: Germany, France, and the U.K. reported weak PMI data, leading to lower European yields and a weaker euro.
• Softer Australian CPI Data: Weaker CPI figures reduced expectations of RBA tightening, impacting the Australian dollar.
• Fed's Hawkish Rate Hike: The U.S. central bank followed through with a 0.25% rate hike with a surprising hawkish stance that boosted the U.S. dollar and Treasury yields.
• ECB's Rate Hike and Lagarde's Comments: The ECB's rate hike by 0.25% was overshadowed by Christine Lagarde's less hawkish comments, resulting in lower European yields.
• BOJ's Yield Curve Control Policy: The BOJ's decision to adjust its yield curve control policy triggered a sharp yen rally, later reversed during the BOJ press conference.
• U.S. Core PCE Price Index: The lower-than-expected PCE index contributed to the risk-on sentiment and supported the U.S. dollar's gains for the week.

Looking forward to the new week, here are the key events to look out for:

• RBA Interest Rate Statement (August 1, 4:30 am GMT): The Australian central bank may raise interest rates by 0.25%, but weaker economic data might lead to unchanged rates or a "dovish hike," potentially weakening the Australian dollar.
• BOE Monetary Policy Decision (August 3, 11:00 am GMT): The Bank of England is expected to raise interest rates by 0.25% due to high inflation. Keep an eye on MPC minutes and BOE Governor Bailey's testimony for policy insights affecting the British pound.
• Employment Data:

New Zealand Quarterly Employment Data (August 1, 10:45 pm GMT): Expected slower hiring growth may raise New Zealand's jobless rate, possibly weakening the New Zealand dollar.

Canada Employment Change (August 4, 12:30 pm GMT): Slower hiring could raise Canada's unemployment rate, impacting the Canadian dollar.

U.S. Nonfarm Payrolls (NFP) Report (August 4, 12:30 pm GMT): Slightly slower U.S. employment growth and subdued wage growth might influence the U.S. dollar. Leading job indicators during the week could also affect USD sentiment.

Unleash the Magic of the Mind's Eye 👁️

Welcome, traders, to an unconventional and powerful segment. Today, we'll explore a unique technique that can elevate your trading performance to new heights: 'Imaginative Visualization.' Over the years, I've witnessed the transformative impact of this practice first-hand. So, grab your cup of joe, and let's embark on an imaginative journey to unlock the untapped potential within you.

1. The Power of Imagination: Imagination is an extraordinary tool that can influence your trading outcomes. By engaging your mind's eye, you can visualize your ideal trading scenarios, cultivate winning attitudes, and enhance your decision-making process. Imaginative Visualization harnesses the power of your subconscious mind to align your thoughts with your trading goals.
2. Creating a Mental Trading Sanctuary: Imagine a tranquil mental sanctuary where you are the master of the markets. Picture yourself in complete control of your emotions, confidently executing trades with precision. Your sanctuary has no room for fear, doubt, or greed. It's a realm of clarity and focus, allowing you to trade with a calm and collected mindset.
3. Practising Under Different Market Conditions: Use Imaginative Visualization to practice trading under various market conditions. Envision yourself navigating through choppy waters, trending markets, and volatile environments. Embrace the challenges and feel the excitement of making informed decisions in real time. You'll sharpen your adaptability as a trader by mentally rehearsing different scenarios.
4. Overcoming Trading Obstacles: Bring your mental sanctuary to life when faced with obstacles in the markets. See yourself calmly analyzing the situation and adjusting your strategy as needed. Embrace setbacks as opportunities for growth and learning. As you overcome challenges in your mind, you'll develop resilience and fortitude in the face of adversity.
5. Positive Self-Image and Trading Success: Imaginative Visualization can transform your self-image as a trader. See yourself as a disciplined, successful, and patient trader who consistently makes profitable decisions. Embrace this positive self-image, and your subconscious mind will work tirelessly to align your actions with this vision.

Action Steps:‌‌

1️⃣ Dedicate a few minutes each day to practice Imaginative Visualization before or after your trading sessions.

2️⃣ Find a quiet and comfortable space where you won't be disturbed.

3️⃣ Close your eyes, take a few deep breaths, and enter your mental trading sanctuary.

4️⃣ Visualize yourself navigating different market conditions and successfully executing trades.

5️⃣ Embrace the emotions and sensations of trading success, and carry this confidence into your real trading sessions.

SIP, LAUGH, TRADE 😁

📈LATTE LINEUP📈

-NZDCAD- ( A+ setup results in loss ❌)

Last week, we provided our esteemed Mastermind subscribers with an attractive setup for NZDCAD. Our analysis revolved around higher time frame (HTF) confirmations, patiently waiting for buying pressure to manifest in a shift of market structure on the lower time frame (LTF) of the 1-hour chart.

As the price fluctuated within a certain range, we kept a close watch for a possible breakout. Our aim was to see the price push higher than the upper limits of the short-term range by achieving a new higher high, followed by a retest that would confirm this breakout with a bullish rejection or engulfing candle.

The market played out precisely as envisioned, aligning with our LTF confirmations to trigger our long position. However, the trade didn't unfold as anticipated. The lesson for you to learn here is the paramount significance of dynamic risk management in trading.

As the price action progressed post-entry, we observed the formation of a new higher high, prompting us to take swift action to safeguard our position. We diligently minimised our risk exposure by trailing our stop loss below the previous low. Consequently, we were taken out of the trade with a minor loss as the price reversed. Choosing to take action was a wise decision, as it prevented a total loss that would have occurred if we had done nothing.

This setup highlights the crucial role of adapting our analysis in real-time and promptly cutting our losses as traders. Rather than hope for the market to turn in our favour, we focus on staying agile and decisive. Our Nexus Hub is invaluable for up-to-date insights and trade adjustments as we continuously evolve our analysis.

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-AUDCAD-

HTF(8-HR): On a higher time frame (HTF), we can observe the emergence of a new low that has resulted in a retracement to test the previous support, which is now expected to act as resistance. This critical level coincides beautifully with the 50% Fibonacci retracement, amplifying its significance.

Our analysis reveals the presence of selling pressure as depicted by the previous indecision candle, providing early indications of the price potentially forming a range and undergoing sideways consolidation.

To gain a closer and more detailed understanding of the price action dynamics, we now direct our attention to the lower time frame (LTF).

LTF(30 mins): The market is range-bound on AUDCAD's 30-minute chart. To potentially start a downtrend, we need to see a clear break of structure with a new lower low. Then, we'll look for the price to retest the previous support turned resistance level. We'll confirm with bearish rejections or engulfing candles before initiating a short position with a stop-loss above previous highs. Targeting the previous higher time frame low offers a favourable risk-to-reward ratio.