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Aussie Pairs

  • #1,941
  • Jan 15, 2008 4:38pm Jan 15, 2008 4:38pm
Quoting youalreadykn
I don't trade EUR/AUD, but I trade other EUR/xxx pairs. I mainly use EUR/AUD as an indicator for sentiment to use when trading other EUR or AUD pairs.

Interesting longterm chart on EUR/AUD though and a breakout does seem likely in the near future.


In which direction to you see EUR/AUD breaking out and why?

rudenstein
  • #1,942
  • Jan 15, 2008 4:43pm Jan 15, 2008 4:43pm
I'll probably go long at 90.91 if it reaches that support, I can crash the remains of my account there.
  • #1,943
  • Jan 15, 2008 4:49pm Jan 15, 2008 4:49pm
Looks like we're getting a small retrace on the daily
Patience + Humility + Study = Success
  • #1,944
  • Jan 15, 2008 4:58pm Jan 15, 2008 4:58pm
Quoting rudenstein
In which direction to you see EUR/AUD breaking out and why?

rudenstein
Fundamentals say it should be sideways with a slight edge to AUD given the commodity markets and yield difference.
Technically, the daily chart shows a bullish flag pattern and still no full daily on the other side of the 38.2% Fib on my chart.... so I'll say all signs point to a break out to the upside after today. Before today, we had a close below the 38.2 and it looked like it was going to turn down.
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  • #1,945
  • Jan 15, 2008 5:03pm Jan 15, 2008 5:03pm
Quoting youalreadykn
Fundamentals say it should be sideways with a slight edge to AUD given the commodity markets and yield difference.
Technically, the daily chart shows a bullish flag pattern and still no full daily on the other side of the 38.2% Fib on my chart.... so I'll say all signs point to a break out to the upside after today. Before today, we had a close below the 38.2 and it looked like it was going to turn down.

I would be extremely cautious going long. The equity markets are exploding. When carry unwinds, AUD & NZD are the first in line to go down.
Humble Lifetime Member
  • #1,946
  • Jan 15, 2008 6:37pm Jan 15, 2008 6:37pm
Quoting Ash
I would be extremely cautious going long. The equity markets are exploding. When carry unwinds, AUD & NZD are the first in line to go down.
Obviously I'm not the only one that sees the correlation between AUD NZD & JPY. So, ok, I'll ask a dumb question; why is it AUD & NZD go south when there's a wall street panic? They always come back strong while the Yen continues to strengthen.

I know, I know, Yen carry, but can we get into more detail? Is it margins being covered? Is it pairs being sold off? Is it too many speculators causing severe volatility? Is it really just panic selling? Is it the big boys playing bigger swings then even some of us larger lot traders can handle? Is it all of the above?

I'd love to hear all yalls thoughts on the matter.
  • #1,947
  • Jan 15, 2008 6:52pm Jan 15, 2008 6:52pm
Quoting TheTopBloke
I'd love to hear all yalls thoughts on the matter.
As the highest yielding G7 currencies, AUD & NZD are overweight when it comes to long carry speculative trade. Over the summer, Goldman reported losing billions in its Global Alpha HF, a large portion of which came from a failed AUD/JPY position. There are really big players speculating in these crosses, and when the equity market sells off, they need to sell their carry positions to maintain their margins on other losing positions (in other markets, not just FX).

AJ was hit especially hard today, due in part by AU running into a wall of resistance at the 9000 level, and gold selling off, both forcing a huge selloff in AU. Carry liquidation tends to have a negative effect on the majors, as when the likes of AUD/JPY is sold, the position is typically repatriated into dollars, thus putting added downward pressure on AU. We've seen somewhat of a lag effect in that respect recently; UJ selling off driving the yen crosses lower, but the dollar majors rallying against the dollar. That divergence might have also fueled today's movement, as the correlations correct themselves.
  • #1,948
  • Jan 15, 2008 7:02pm Jan 15, 2008 7:02pm
Quoting Trader KGB
As the highest yielding G7 currencies, AUD & NZD are overweight when it comes to long carry speculative trade. Over the summer, Goldman reported losing billions in its Global Alpha HF, a large portion of which came from a failed AUD/JPY position. There are really big players speculating in these crosses, and when the equity market sells off, they need to sell their carry positions to maintain their margins on other losing positions (in other markets, not just FX).

AJ was hit especially hard today, due in part by AU running into a wall of resistance at the 9000 level, and gold selling off, both forcing a huge selloff in AU. Carry liquidation tends to have a negative effect on the majors, as when the likes of AUD/JPY is sold, the position is typically repatriated into dollars, thus putting added downward pressure on AU. We've seen somewhat of a lag effect in that respect recently; UJ selling off driving the yen crosses lower, but the dollar majors rallying against the dollar. That divergence might have also fueled today's movement, as the correlations correct themselves.
I've been waiting on the combination of dollar strength + yen strength as the doomsday for the carry trade and today was a perfect example of why. We haven't really seen the combo for any prolonged period of time, but I think we may see it after a few more rate cuts.

When/if that happens, I'm shorting every high yielding pair to death. Until then, I see panic selling that makes little sense. xxx/JPY going down is understandable, EUR/xxx going through the roof is not.
  • #1,949
  • Jan 15, 2008 7:12pm Jan 15, 2008 7:12pm
Price home buying season in Australia...CHEAP TOO, if you think about it.

All of Europe buying houses down there for chump change. It probably going to be THE place to live in 10 years.
  • #1,950
  • Jan 15, 2008 7:18pm Jan 15, 2008 7:18pm
Quoting youalreadykn
We haven't really seen the combo for any prolonged period of time
7/13/07 - 8/17/07 was reasonably prolonged.

That's what I'd like to see again. 2000 pip retraces on the yen crosses. So far, GJ and CAD/J have acquiesced quite nicely. EJ, AJ, and NJ have stubbornly resisted.
  • #1,951
  • Jan 15, 2008 7:27pm Jan 15, 2008 7:27pm
Quoting TIckerShuffl
Price home buying season in Australia...CHEAP TOO, if you think about it.

All of Europe buying houses down there for chump change. It probably going to be THE place to live in 10 years.
Hmm, home loans are through the roof... sounds awfully familiar, just can't point my finger on where I've seen that recently. Oh, right.
  • #1,952
  • Jan 15, 2008 11:35pm Jan 15, 2008 11:35pm
We're doing some two way business around the lows. London should give direction.
Patience + Humility + Study = Success
  • #1,953
  • Jan 16, 2008 1:22am Jan 16, 2008 1:22am
So we have some key levels approaching before we clear the 200 ema. We have to pass through the november low of 92.60, if we pass through thatthen 92.04 and then 85.99 where this bull move to 107.87 started. Now that's on the daily. On the weekly charts, there's only 91.73 standing between current price and 85.99
Patience + Humility + Study = Success
  • #1,954
  • Jan 16, 2008 2:09am Jan 16, 2008 2:09am
Quoting DutchTrader
So we have some key levels approaching before we clear the 200 ema.
200 daily ema on AJ I'm showing at 98.53.. Where are you seeing yours at?
  • #1,955
  • Jan 16, 2008 2:11am Jan 16, 2008 2:11am
Quoting Trader KGB
200 daily ema on AJ I'm showing at 98.53.. Where are you seeing yours at?
I'm on the weekly. On the daily I have 98.46
Patience + Humility + Study = Success
  • #1,956
  • Jan 16, 2008 2:24am Jan 16, 2008 2:24am
Quoting DutchTrader
I'm on the weekly. On the daily I have 98.46
I see.

offtopic - Dutch, have you been following USD/CAD tonight (and CJ)? Unbelievable how poorly the loonie is doing..
  • #1,957
  • Jan 16, 2008 2:28am Jan 16, 2008 2:28am
Quoting Trader KGB
I see.

offtopic - Dutch, have you been following USD/CAD tonight (and CJ)? Unbelievable how poorly the loonie is doing..
Yeah it makes no sense. Oil above 90, and gold approaching 1k and they can't make headway. This whole "Canada is tied to the US' thing is killing the Cad. We're looking at a possibility of sub 100 Cad/Jpy
Patience + Humility + Study = Success
  • #1,958
  • Jan 16, 2008 2:43am Jan 16, 2008 2:43am
Quoting DutchTrader
I'm on the weekly. On the daily I have 98.46
Indeed. Looks like $/CAD just ran all the stops on the recent 1.0206 high but failed at the December high & gave it all back. Let's see if the double top holds for now (speaking of, that Mizou Bank guy was spot on with his double top call on AJ @ 107 back in Oct, I should have given him more credit).
  • #1,959
  • Jan 16, 2008 2:44am Jan 16, 2008 2:44am
Quoting DutchTrader
Yeah it makes no sense. Oil above 90, and gold approaching 1k and they can't make headway. This whole "Canada is tied to the US' thing is killing the Cad. We're looking at a possibility of sub 100 Cad/Jpy
I agree. I expect them to be lowering interest rates at their next meeting also.

Got 212 pips on AUD/CHF last night. Letting my NZD/CHF ride.
Humble Lifetime Member
  • #1,960
  • Jan 16, 2008 2:46am Jan 16, 2008 2:46am
Dutch,
when you calculate pivots for the daily chart, which numbers do you use?
Weekly(H/L/C)?
There are no certainties only oppurtunities.
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