AUD/USD

Nice pinbar indeed.

added nice size possie at 8715

Is it a counter-trend move? Where is your tp level?

I just posted this....

Yes, it's obviously a counter trend move based on chart patterns and interest rate comparisons.

This upmove for the greenback is overextended, period.

Remember when the Fed had an emergency meeting and cut the Federal funds rate by 75 bps? The aud/usd was at .85 at the time. The rate was slashed by an additional 150 bps for a grand total of 225 bps. The resulting exchange rate was .98 for a grand total of $.13 or 1300 pips.

The current downmove has gone from .98 to .86 on the speculation of 50 bps for the next meeting. Granted, the market is pricing in future hikes all the way through 2009.
Last time I checked futures that far the market was pricing in the RBA slashing down to 5.5% at the END of 2009 for a 175 bps.

Do the math.
To complete argument.

The futures market has the FED raising 25bp before the end of 08 or early 09.

My comparison allows for 225 bps of adjustment. The earliest this could possibly happen would be a year from now. Bottom line is this. The market has gotten far ahead of itself and a correction is inevitable.

Final add at 8675. We'll see

Final add at 8675. We'll see if I get some cooperation here.

maybe a start of a new upward channel ... sure looks like, hope I`ll ride it long

Come on Aussie, come on, come on.

Come on Aussie, come on!!

Buy stop order 10 pips above yesterday's pin bar. Getting close now

You should have nice green pips Tex

This is just everyone freakin out at the dramatic and fast decline. The market is confused and cant handle the reality. Interest rates are gonna come down, then the aussie follows suit.

I believe you are the one who correctly called for AUDUSD to come down some time ago when the world was crying for AUD to make it parity. Are you thinking that it is now due a retracement after a huge drop?

Yes sir! I took some modest gains off as this baby stalled at the top of the developing channel. The sweet dough will happen if the channel gets blown out topside.

I'm saying this is a short term stop before we go downward again.

See this post back in May: http://www.forexfactory.com/showthre...18#post1999118

You'll notice the mid and lates 80's dramatic rise and subsequent falls. In those cycles on the downward trend there was a point where it bounced a bit and then continued down. These were after a prolonged period of high debt (then bust) and a commodity boom (roughly and not in order).

Then you'll see in 2001 just before the big dipper down to .48 it did a simillar play out in 96 - albeit smaller and spread over time.

But the most interesting one is in 2003 - the early stages of the boom we just experienced.

I see we'll either experience a flat liner of the 90's if GDP and Unemployment really bums (brought on by really bad GDP the world over causing a decline in commodity demand and the RBA not cutting interest rates quick enough) or if the world settles down a bit (and the rba is quick to the mark) we play out 2003 again and move into another cyclic boom ready to start playing out from around 2010 onwards.

One big caveat on all of this - Australia's house prices are some of the most expensive in the world (if not the most expensive) and many people cant afford to buy them. Secondly the explosion in the last 10 years of GDP was fuelled by credit reaching to almost $200B+ last year. Commodity exports are around $180-$240 billion per year (depending on commodity prices). The Australian economy generated more debt than commodity exports in the last FY.

Debt has plummetted to around $5Bper month over the last few months. Went from $15.7B, $13.4B, $9.8B, $9.2B and last in Jun $5.6B. The Australian economy when it was booming!! was adding $30B per month in added debt- that money flow has stopped. And this is what the RBA needed to halt to bring inflation under control (hence the high interest rates). But the Aussie economy is fragile. Small pop, reliance on commodities, reliance on imports - coupled with unsastainable property valuations along with non commodity exporters and local manufaturers (competing against low priced imports) desimated by the high AUD. Add to this the Fed Gov in Australia bringing in carbon credits and you could see another play of the 97 - 2002 cycle for the AUD (2000/2001 saw an effect on the economy of the GST introduction). (nuckingfuts you just might see that .48 again!).

This is probably the most sensible article to sum up the whole situation and what will effect the trend for Australia in the next 5-10 years.
http://smallbusiness.smh.com.au/grow...910832315.html

Watch the RBA closely. What they do in the next year is critical to the longer term health of the Australian economy and especially the AUD. They have a tough job ahead. All they can do is change interest rates and it will take a lot more than that to guide Australia through the next few years.

Closed out for good profits at 8780.
Interesting to note that kiwi is bouncing off 4HR TL resistance.

http://3.bp.blogspot.com/_nmIuQsC9b-...Server+aud.pngIt was update at 6:45am ET

Deathstick (aka aud/jpy) is close to tipping over and would drag the aud/usd down to the depths of he**.

I still believe in my interest rate analysis but it's starting to look like market irrationality will be the ultimate factor and I'll obviously wait to reestablish a long position.

800s gone.Where is the next big supp anyway
700-650 maybe ?

She came 6 pips short of my entry point. Will cancel the buy stop if the price breaks the PB low.

782-783, yes then 650

This week is one of the sleekest and neatest week..by far...for me..

I am pretty blessed with 1326 pips for the week...I hope I calculated correctly(see the pic for urself)

The +ive pips contributed mainly by AUD/USD, EUR/JPY pair.....

Have a nice weekend!
sonic