Technically the price has broken above a multi-year high, then come back to test the breakout. I have taken the opportunity to enter. Fundamentally Australia appears to be recovering well, albeit on the back of the Chinese credit bubble. I have been looking for a way to play the bubble and perhaps the relative exposure to China of Australia vs. New Zealand is it.

Intra-day the entry is rather messy — but IG Index doesn’t allow you to place an order to open inside the dealing spread (an irritating bug) and I was prepared to accept an entry above the current market level if it ran up today — so I have just split the difference and jumped in now. The stop is below the breakout level, with a bit of leeway, and it helps that the spot is presently sitting on 1.30, a level just above the previous resistance.

Here is a chart of the spot:

And here is a chart of the forward that I have actually traded, with approx. entry and stop positions shown:

Charts from IG Index.