We've been in and out of several positions on AUD/USD in the past couple of weeks.  We slightly ahead in trading with a few excellent positions balancing out a few more that stopped out.  Tonight the Reserve Bank of Australia is releasing its GDP numbers, and as a result we're analyzing recent price action to determine what plays, if any, we would like to make

On a longer term timeframe, the 55 day moving average is rising, and is recently above current trading at around 0.9133.  The rising long term daily average points us towards only entering on the bullish side if an opportunity presents itself

There is also a loose symmetric triangle forming starting around the beginning of November.  The triangle points to a price tightening inward towards 0.9125, which is close to the SMA(55) on the daily.  We believe this tightening is foreshadowing an upcoming price move.

For a longer term trade, the recent lows around 0.8905 (Nov 2nd) and 0.8946 (Nov 27th) are important when determining a stop.  Since we'd like to take advantage of the difference in interest rates, a longer term trade is in our favour, which leads us towards a 0.89 area for a stop to allow for more volatility.  Allowing for more volatility will most likely result in a longer term trade where we can collect the interest difference.

Resistance has shown itself in the 0.9320-ish area a few times with highs at 0.9328 (Oct 21st), 0.9322 (Nov 25th) and 0.9323 (Dec 3rd)

Tightening in to hourly bars, it becomes apparent that the area around 0.9175 has been a source of resistance frequently in the last 2 weeks

Our plan is to watch smaller timeframes (hourly and 10 minute) if the price action moves towards 0.91.  We will not purchase higher than 0.9125 and will maintain a 0.89 stop.  This equates to 225 pips of risk worst case.  We will calculate the position size so that this maximum loss will equate to no more than 10% of our available capital (Rule #1).  If we maintain an exit at 0.9320, we are looking at 195 pips of profit.  This 1.15 Risk to Reward does not meet our requirements for a solid trade.

If we decide to tinker and adjust the upward price target to the October high of 0.9406 (changes Risk/Reward to 0.8) , or move up our stop to the 0.9020 (changes Risk/Reward to 0.53) level we are just trying to justify a trade that was objectively thrown out.  That said, the GDP news is a large chunk of fundamental information and if the real numbers beat the consensus estimates of 0.4, and the market starts to significantly move showing that the information is not yet priced in, we may entertain the higher stop of 0.9020 if the strength of the hourly timeframe is significant.  Otherwise, we'll let this one pass.

[UPDATE: RBA's GDP disappointed @ 0.2 as opposed to a 0.4 expected value.  The pair immediately shed 50 pips in 2 minutes while we were on the sideline]

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