Commodity Currencies

Looking for some kind of trade in this pair this week. I suspect a intraday short of AUDUSD in is the cards, on the idea that there will be some profit taking. ie sell at .94

Price action this week on the twins down under should be a two way street. Traders should use whatever signals they choose for potential range trading. Beware these two way streets have steep hills.

Be nimble. Be profitable. Be happy

Kiwi is stuck between the 22 year high at 8107 and 8020, which was the channel high before the breakout. There has already been one test of 8020 and a march higher should be seen sooner or later. However, there is room in my indicators for another test of 8020 potentially. Buying on dips is my preferred strategy. Still holding longs FWIW.

With the commod's flying I got to thinking about when I started trading and was a big fat loser. What do I know now that I didn't then?

First off, I am used to making pips. I have experience making pips and know how to do it. That is not a small factor and certainly not to be overlooked. Experience in any facet in life is invaluable and day trading is no different. I'm sure most members here at FF have read many insightful posts that offer EXCELLENT AND WISE tips. But can you apply them? Do you know how and when to use them? I know I didn't when I first started......

I guess there a couple things to be learned/remembered from the ongoing moves.

When a long standing pattern breaks don't minimalize how important it is.

Don't get caught up in FUNNYmentals. There is ALWAYS a reason for any move. PRICE MAKES NEWS, NEWS DOES NOT MAKE PRICE (98% OF THE TIME)

don't close out a winning position until you have a great reason to do so (aka let your winners run)
Expectations are important here.

Still holding longs FWIW....

I just got through reading several analyst reports about the Kiwi. Many, including Ms. Danica Hampton, are focusing on fundamental problems in the New Zealand economy. They are calling for a sharp correction.....

Still holding longs FWIW. Added a small bit at 8105

MEA Media Release, Tuesday 26 February 2008.

The New Zealand Manufacturers and Exporters Association, (NZMEA), says that exporters should not expect an immediate cut in interest rates, despite the pressure caused by the strong NZ dollar. The Association is calling for the implementation of other means to restrain domestic inflation, and that a variable rate compulsory superannuation saving scheme could be more effective at curbing exchange rates than using interest rates.
“The underlying policy drives the spread between New Zealand’s inflation and interest rates, which are the highest in the developed world; the underlying policy needs attention rather than talking about headline exchange rates. Pointing in the direction of the RBNZ will do no good unless underlying Government policy changes”.

At present, the focus remains on the symptoms of the problems facing exporters and not the underlying causes. New Zealand’s policy framework is creating an imbalance in the economy and the domestic sectors generate more than twice the inflationary pressure of the trading sector. Yet as long as the OCR is the only lever available to the RBNZ, nothing will change, the NZ dollar will remain strong on speculative pressure and conditions will not improve for our exporters”, says Mr. Walley.

NZMEA – the authentic and independent voice for manufacturers and exporters.

Still valid. 8043/56 will offer big support and 8020 will offer huge support if da rotten fruit falls off the tree. Buying on the dips still gives me kicks.

I'm trying to plan for PPI and I must say it's tough. Just about any way you spin it high inflation in the US is bad bad bad. Bad for stocks and bad for growth. It could and should spike the USD higher and gold as well.

Commod's might move back down near daily lows on a spike if PPI comes in at expectations or higher. In addition, stocks lower will be a drag.

Technically, the commod's are so very very bullish though....

Taking half profits here at 8105 and 9280 FWIW

PPI will indeed be pivotal, NZD is currently supported by bids at 8060 strictly on yield differential with the USD. Should be a volatile morning.

Loonie could be the best short today as gold will get the most support from PPI.

So much for that trade. stopped -20

Commod's holding up very well in the face of a soaring yen and equity futures falling.

Gold is a beast, Kiwi looks exhausted imvho on the 4hr and 1hr

The only thing that happened "by the book" today in the US trading session was that gold advanced. Stocks had two very good reasons to tank.....they advanced. The dollar had a very good reason to rebound.....it tanked. What a day!

On a personal note. I think I made some good money management decisions today. I took profit when uncertainity was very high and let my profits run with the strong techs (which is looking good BTW ) The main reason I felt comfortable doing this is I know there are still literally dozens of trading opps left this week alone. At the time I cut my possies in half kiwi had a weekly range of 97 pips and aussie had a range of 86 pips. There is almost no (nothing is certain in forex) chance that these ranges will be less than 150 and probably will end up around 250. Keeping a level head and not forgeting about the forest while staring at one tree is a GOOD thing.

Ride Ride Enjoy The Ride

Short levels are currently .8103 and .9302 No reason to short til then

Took most of remaining half possies off at 8170 and 9405. Still holding small longs FWIW

Short time price action divergence between aussie (strong) and kiwi (flat) is worth noting.

Very Very aggressive traders could start to build a short position in Aussie......

i built short trades on aussie.. @ 0.9136! and it just kept going higher and higher bouncing off the trendline.. well..

its about time it came down for a nice retrace of some sort..

but back on topic: yes.. i think its good to start building short positions on Aussie

9325/35 will be the key level in determining if any moves down are small retracements or a larger correction.

that was an astounding move. Worse case scenerio for trader with loose style.