Australian Dollar May 'Free Fall'

What do you guys think:

http://www.bloomberg.com/apps/news?p...Ycs&refer=home

Obviously interesting for the carry traders out there......

Check all cycles going back 20 years and the Aussie spikes and then within a month to a few months looses a lot.

On a graph this is looking like the cycle of 88 where the AUD hit .89 and retreated to .74 within 4 months. The leadup to 88 on the graph looks eerily the same as this cycle.

There is a lot of carry trades in this cycle more than ever as many smaller investors have been participating in carry trades so there could be higher volumes of trades trying to pull out all at a very fast pace. That's essentially how the AUD got so high - so many people trying to get in at the best price believing it will always go higher.

once atime i stuck with it for three nights even i closed at BE...

what ever happen i will not touch it again...

it`s know how to fly ... but it`s hard 2 make it drop..

I don't know. I think AUD is a strong pair, its been winning against the pound, usd, and almost all currencies for 7 years. I'll go long AU at .955, but it could drop some pips sure.. It seems pairs usually drop when everyone gets excited about them. .93? Nobody excited. .98, the world wants that! Now watch it fall to .80 and everyone scared buy it. Ok, but also let's look at chart and see...

I know the author was speaking from a macro standpoint, but it is funny nonetheless that Aussie is the standout currency this Sunday up half a percent.

Fighting this trend is a dangerous bet. Most agree that a flirt with parity is likely to happen. With equities/financials recovering, AUD/JPY could easily return to its 107 highs, dragging AUD/USD along with it.

This week's CPI for the last quarter and then the RBA minutes of next month could put traders in a betting position for interest rate cuts. This will be the start of the downward trend:

http://www.news.com.au/business/stor...-31037,00.html

It could be today that money is flowing into Australia and into the ASX as investors could be perceiving some bargain buys. Although buying shares at such a HIGH AUD could also be risky with uncertainty not around if interest rates will rise but if interest rates will fall which will mark the end of this up cycle for the AUD.

AUDUSD is desperately making attempt to hit parity before likely retreating just as the EURUSD did earliear in april or so . i hope the axe and dagger of the US does not fall on this AUD .

EUR/USD = AUD/USD + equity volitility

(over the long-term that is)

Super impose two weekly charts and you'll see what I mean. So if AUD/USD goes south, EUR/USD would likely follow suit.

How is that correlating with AUD/JPY?

Never said that it does. Look toward USD/JPY x AUD/USD for that one.

yeah I know .... but was wondering what the AUD/JPY pair is going to do when AUD/USD goes south. I guess JPY is more stable keeping USD in check?

lol I know exactly what you mean..........this is the only pair which I have vouched not to trade........
Also I would not be expecting free fall untill mid october....three months left for it to stay in range or go higher.....as it has a co-relation with gold and these months ie aug sep and oct mid are very important for gold

Good luck short gold an aus on or aroun the 1st or 2nd week of oct....

Happy trading
Rav

We are told that higher interest rates will attract capital, as it increases the return for investors. Now a higher interest rate will mean that someone can put money in the bank and make a greater return, but doesn’t it also impact on the growth in the value of assets in a negative way? In NZ at the moment, currency fluctuations seem to be driven by European and Japanese investors who simply want to put their money in our banks - in this case a higher interest rate has increased the capital inflow, which in turn has led to an appreciation in our dollar.
However, bonds and bills are one type of investment good. There can also been investment in property and the stock market. Higher interest rates will reduce peoples willingness to borrow and over the following months they will lead to a reduction in domestic economic activity. If this leads to a slowdown in the rate of property price growth (or a reduction on rental yield growth), property becomes a less attractive investment. The same holds true for stocks. If current global investors are moving into property and stocks, then an increase in the interest rate will actually reduce capital inflows, and possibly lead to a depreciation in the exchange rate.
As a result, it is important to look at what investments foreign capital will move to and from before we can state whether a higher interest rate will lead to a higher exchange rate. As we can’t seem to forecast the intricacies of these individual movements, our exchange rate forecasts become very path dependent (for a similar example look at forecasts of oil prices)

that means...t author..SHORTED AUD/USD pair and hitting his SL soon!!!

sonic

Wedges are usually continuation patterns, however, this is is pointing upward toward the trend... could be a bearish indicator.

http://i37.tinypic.com/2cy2xr5.gif

hi all
yes we will see a free fall for AUD IN in the next time

also http://www.bloomberg.com/apps/news?p...Ycs&refer=home

I'm looking for it because I'm short in 0.9670

maybe ,time nice for short AUDNZD

im short AUD but AUDCHF