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AUDUSD - No love for commodity currencies?

  • #1
  • First Post: Jan 4, 2008 10:03am Jan 4, 2008 10:03am
Im getting clobbered in AUDUSD.


Strength in EURAUD has caused no benefit from weak USD data for AUDUSD. I have to think this can not go on for long. EUR data indicating less of a case for rate increases, while AUD is on fiere with exports and an never ending customer for mineral and energy exports. - China.

Not going to get shaken out this time.

*gulp*
  • #2
  • Jan 4, 2008 10:18am Jan 4, 2008 10:18am
hey mate, it is yet a right time 2 say goodbye 2 aussie currency. We all can see the set of MA in Week chart are showing a upside spreading pattern for it. maybe you just trace the 1H and 4H chart and pick a right time to get it on again.
  • #3
  • Jan 4, 2008 10:24am Jan 4, 2008 10:24am
Analyst on CNBC yesterday talked about potential weakness in AUDUSD...but despite the MA, the analyst, etc...I am holding for now. Looks like it's testing lower trend line to me.
  • #4
  • Jan 4, 2008 11:13am Jan 4, 2008 11:13am
  •  TrevA
  • | Joined Oct 2007 | Status: my brain has a mind of its own | 166 Posts
Quoting TIckerShuffl
Im getting clobbered in AUDUSD.


Strength in EURAUD has caused no benefit from weak USD data for AUDUSD. I have to think this can not go on for long. EUR data indicating less of a case for rate increases, while AUD is on fiere with exports and an never ending customer for mineral and energy exports. - China.

Not going to get shaken out this time.

*gulp*
Short term - Up - I love the Aussie. Looming interest rate rises makes it attractive to carry traders which will push the currency up in the short term.

Long term (1-2 year view) - Down! If the US economic problems persist then we will see reduced Chinese exports to the USA and this will have a knock-on to the Aussie with reduced mineral exports to China... Reduced exports will place an economic squeeze on the Australian economy.

TrevA
  • #5
  • Jan 4, 2008 1:20pm Jan 4, 2008 1:20pm
Here's a report that has me adding more and more AUD for 2008. The interest will be nice and appreciation should do well - chinese growth is not 100% dependant on exports to USA...we hope.

http://pdf.aigroup.asn.au/economics/pmi/PMI_Dec07.pdf
  • #6
  • Jan 5, 2008 5:41am Jan 5, 2008 5:41am
Quoting TIckerShuffl
Strength in EURAUD has caused no benefit from weak USD data for AUDUSD.
It seems to me like the weakness is due in part to the strength of the Yen in the last few sessions.

The AUDUSD does look like a good potential upside trade for the coming months, though we may need to see the appetite for high-yielding commodity currencies to return for any resistances to be broken. No love for the NZD this week, or the CAD for that matter
Just trying to make some dollars and sense...
  • #7
  • Jan 5, 2008 9:20am Jan 5, 2008 9:20am
Quoting PiP sL@y3r
It seems to me like the weakness is due in part to the strength of the Yen in the last few sessions.

The AUDUSD does look like a good potential upside trade for the coming months, though we may need to see the appetite for high-yielding commodity currencies to return for any resistances to be broken. No love for the NZD this week, or the CAD for that matter
I think you are correct. The yen strength and unwinding of carry trade is the larger culprit. At first I did not notice because the AUDUSD was holding up so well until that jobs report sent the USDJPY tumbling further...I guess the dam broke so to speak. Even still, AUDUSD finished off the lows and above key moving average on daily, so I remain cautiously optimistic.

I picked up my last mini at .8711 and I am average at .8773 - I am prepared for drop, but not sure how to handle a severe drop..cut losses and reenter or wait for a bottom and load the boat. The forcoming housing data will really shape my decision going forward. Minimum wage in australia is about 2 times US at around $14 and despite having a smaller GDP and the 15th largest economy on that metric, I feel the Aussie is fairly resilient in there comparably stable economy.
  • #8
  • Jan 5, 2008 9:21am Jan 5, 2008 9:21am
Quoting TIckerShuffl
I think you are correct. The yen strength and unwinding of carry trade is the larger culprit. At first I did not notice because the AUDUSD was holding up so well until that jobs report sent the USDJPY tumbling further...I guess the dam broke so to speak. Even still, AUDUSD finished off the lows and above key moving average on daily, so I remain cautiously optimistic.

I picked up my last mini at .8711 and I am average at .8773 - I am prepared for drop, but not sure how to handle a severe drop..cut losses and reenter or wait for a bottom and load the boat. The forcoming housing data will really shape my decision going forward. Minimum wage in australia is about 2 times US at around $14 and despite having a smaller GDP and the 15th largest economy on that metric, I feel the Aussie is fairly resilient in there comparably stable economy.
There's a trendline on the weekly at 8667 watch that level.
Patience + Humility + Study = Success
  • #9
  • Jan 5, 2008 11:34am Jan 5, 2008 11:34am
Quoting DutchTrader
There's a trendline on the weekly at 8667 watch that level.
That level may not hold if the Yen continues to enjoy another leg down. I'd prefer to watch the weekly trendline of the AJ on any offering of this receding decline. The previous support @ 93 seems like the appropriate magnet to draw the longs into the market, thus it seems more likely that 0.855 level would make another play for support, otherwise the 0.84 is the sturdier trendline.
Just trying to make some dollars and sense...
  • #10
  • Jan 5, 2008 11:52am Jan 5, 2008 11:52am
Quoting PiP sL@y3r
That level may not hold if the Yen continues to enjoy another leg down. I'd prefer to watch the weekly trendline of the AJ on any offering of this receding decline. The previous support @ 93 seems like the appropriate magnet to draw the longs into the market, thus it seems more likely that 0.855 level would make another play for support, otherwise the 0.84 is the sturdier trendline.
So you are short I assume?

Looking at the options for AUDUSD, looks like key volumes at .91 and .95 with alot of straddles from .87 to .89 - look at all those contracts at .91.

These are for march by the way!

XDACA n.a. n.a. n.a. n.a. n.a. n.a. 75.00
ADNCC n.a. n.a. n.a. n.a. n.a. n.a. 75.50
XDACE n.a. n.a. n.a. n.a. n.a. n.a. 76.00
ADNCG n.a. n.a. n.a. n.a. n.a. n.a. 76.50
XDACI n.a. n.a. n.a. n.a. n.a. n.a. 77.00
ADNCK n.a. n.a. n.a. n.a. n.a. 3 77.50
XDACM n.a. n.a. n.a. n.a. n.a. 10 78.00
ADNCO n.a. n.a. n.a. n.a. n.a. 1 78.50
XDACQ n.a. n.a. n.a. n.a. n.a. 10 79.00
ADNCS n.a. n.a. n.a. n.a. n.a. n.a. 79.50
XDACU n.a. n.a. n.a. n.a. n.a. 10 80.00
ADNCW n.a. n.a. n.a. n.a. n.a. 10 80.50
XDACB n.a. n.a. n.a. n.a. n.a. 45 81.00
ADNCD n.a. n.a. n.a. n.a. n.a. 33 81.50
XDACF n.a. n.a. n.a. n.a. n.a. 4,629 82.00
ADNCH n.a. n.a. n.a. n.a. n.a. 235 82.50
XDACJ n.a. n.a. n.a. n.a. n.a. 58 83.00
ADNCL n.a. n.a. n.a. n.a. n.a. 30 83.50
XDACN n.a. n.a. n.a. n.a. n.a. 80 84.00
ADNCP n.a. n.a. n.a. n.a. n.a. 21 84.50
XDACR n.a. n.a. n.a. n.a. n.a. 55 85.00
ADNCT n.a. n.a. n.a. n.a. n.a. 68 85.50
XDACV n.a. n.a. n.a. n.a. n.a. 305 86.00
ADNCA n.a. n.a. n.a. n.a. n.a. 448 86.50
XDACC n.a. n.a. n.a. n.a. n.a. 5,145 87.00
ADNCE n.a. n.a. n.a. n.a. n.a. 113 87.50
XDACG n.a. n.a. n.a. n.a. n.a. 204 88.00
ADNCI n.a. n.a. n.a. n.a. n.a. 192 88.50
XDACK n.a. n.a. n.a. n.a. n.a. 5,980 89.00
ADNCM n.a. n.a. n.a. n.a. n.a. 366 89.50
XDACO n.a. n.a. n.a. n.a. n.a. 893 90.00
ADNCQ n.a. n.a. n.a. n.a. n.a. 1,239 90.50
XDACS n.a. n.a. n.a. n.a. n.a. 44,009 91.00
ADNCU n.a. n.a. n.a. n.a. n.a. 2,116 91.50
XDACW n.a. n.a. n.a. n.a. n.a. 1,350 92.00
ADNCB n.a. n.a. n.a. n.a. n.a. 209 92.50
XDACD n.a. n.a. n.a. n.a. n.a. 558 93.00
ADNCF n.a. n.a. n.a. n.a. n.a. 125 93.50
XDACH n.a. n.a. n.a. n.a. n.a. 341 94.00
ADNCJ n.a. n.a. n.a. n.a. n.a. 799 94.50
XDACL n.a. n.a. n.a. n.a. n.a. 27,552 95.00
ADNCN n.a. n.a. n.a. n.a. n.a. 792 95.50
XDACP n.a. n.a. n.a. n.a. n.a. 237 96.00
ADNCR n.a. n.a. n.a. n.a. n.a. 347 96.50
  • #11
  • Jan 5, 2008 12:15pm Jan 5, 2008 12:15pm
Quoting TIckerShuffl
So you are short I assume?
Considering the volatile movements we've received in the past couple sessions in the markets, there's limited reward to play for IMO. When in doubt, stay out.

Those options play could be a good indicator of commitment for the current LT trend. I'd expect more attention be placed on AUD as the Olympics gets into hoopla mode.
Just trying to make some dollars and sense...
  • #12
  • Jan 5, 2008 3:24pm Jan 5, 2008 3:24pm
Quoting PiP sL@y3r
Considering the volatile movements we've received in the past couple sessions in the markets, there's limited reward to play for IMO. When in doubt, stay out.

Those options play could be a good indicator of commitment for the current LT trend. I'd expect more attention be placed on AUD as the Olympics gets into hoopla mode.
Yeah I didn't mean to be smart ass about your position...why should I assume you ahve anythign at risk these days. It's nuts. hehe
  • #13
  • Jan 5, 2008 4:02pm Jan 5, 2008 4:02pm
At first glance it may seem that the ever increasing chance of a U.S. recession and lower interest rates from the Fed would benefit the AUD/USD, but that is not the case for a variety of factors.

While the interest rate picture still heavily favors the AUD, the stock market needs to stabilize first in order for people to be willing to start buying up AUD's in great number.

Gold prices are making new highs but the prospect for slower global growth via the U.S. slowdown may slow down the demand for commodities.

The Bank of England and Bank of Canada both started to lower interest rates following the Fed and that had some profound effects on the market. People were starting to realize that this whole story about the rest of the world "decoupling" from the U.S. economy was a bit exaggerated.

Therefore in the current environment the AUD will have a difficult time benefited from the weakness in the dollar. In order for it to start gaining ground substantially people's uncertainty about the outlook for global growth needs to be resolved.
Private message me for a link to my order flow website.
  • #14
  • Jan 5, 2008 4:56pm Jan 5, 2008 4:56pm
True.

But worth noting...Australia went through their housing boom and bust years ago, and although they are currently experiencing some housing pressures they seem relatively stable by comparison.

As far as global growth goes, one thing is for certain, USA will not be financing it - except in the form of a weakened dollar perhaps. Will global growth continue? that is the big question, I have to think it will - because it has to - and how much the USA benefits remains a mystery.
  • #15
  • Jan 5, 2008 10:53pm Jan 5, 2008 10:53pm
Quoting grkfx
the stock market needs to stabilize first in order for people to be willing to start buying up AUD's in great number.
While the AUD does indeed take the lead from the global risk appetite for higher-yielding assets and the ASX does sympathises with Wall Street, the current slide in the Aussie may be a temporarily or limited trend. The uncertainty, followed by data confirmation (NFP) and resulting in further speculation and a reworking of economic models for the next few quarters has given the Yen strength and a flocking of the Aussie. Nevertheless, interest rates differential should return to favor and the Aussie should resume its coordinates with the recent metals (Gold) and commodities (Wheat) upswing - even if the S&P500 continues to deteriorate. However, the suggestions of a weaker U.S. economy slowing down the demand of commodities is a valid argument that'll have any AUD rallies in check of solid resistance just below 0.90.

I think it'll be interesting to see how China responds after the month of August and the concurrent economic environment leading into the second half of 2008. Many in the Asian (Chinese) investors believe that the Chinese government officials will not allow any severe damage to be done to their stockmarkets leading to their key showcase - Beijing Olympics.

By the way, backtesting has showed that years ending in 8 (eight) has been very positive for Asia-Pacific stockmarkets, though in 1998 we did see a major event in the previous year to prep it up. Years ending in 9 (nine) are positive for Wall Street, though the 1999 tech-bubble may have skewered those indications.
Just trying to make some dollars and sense...
  • #16
  • Jan 5, 2008 11:02pm Jan 5, 2008 11:02pm
FWIW Aussie wheat production is down due to haphazard weather conditions. There's also the danger of subprime crisis spreading down under.
Patience + Humility + Study = Success
  • #17
  • Jan 6, 2008 2:19am Jan 6, 2008 2:19am
Quoting DutchTrader
There's also the danger of subprime crisis spreading down under.
Already has to some degree with the Centro Properties debacle.
Just trying to make some dollars and sense...
  • #18
  • Jan 6, 2008 8:33am Jan 6, 2008 8:33am
hi guys,
long term support is near by, and i can see long AUDJPY from here. any ideas?
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  • #19
  • Jan 6, 2008 8:50am Jan 6, 2008 8:50am
You would think in the flight to safety people would be interested in Aussie Treasuries since the yield is so healthy compared to US bonds. Any comments on what might detract people from buying the Aussie simply for bond yields?
  • #20
  • Jan 6, 2008 9:05am Jan 6, 2008 9:05am
Quoting TIckerShuffl
You would think in the flight to safety people would be interested in Aussie Treasuries since the yield is so healthy compared to US bonds. Any comments on what might detract people from buying the Aussie simply for bond yields?
Bonds move inverse to currencies, no?
Patience + Humility + Study = Success
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