AUD/USD

I thought you were done for the week . The H1 is showing a downtrend, but you never know . Confidence is being restored back and high yielding currencies might be getting their investors back. What do you think ? is the ending wave of the downtrend?

Thought you guys might be interested in this:

``It's unavoidable that the U.S. and Europe go into recession and probably Japan, too, and Asia will slow,'' said Sydney-based Richard Grace, chief currency strategist at Commonwealth Bank of Australia. He expects the currency will reach 59 U.S. cents in the first quarter of 2009. ``

Source: Bloomberg.

wow that is a sobering projection.

.59 cents??? Perfect timing to load up on Aussie and New zealand dollars before leaving the USA for the land down under.

EDIT trying to compute that target...don't see anything to support that...perhaps someone needs to cover their shorts?

The current bullish movement should go to 0.6950 or 0.7023. Correction should find support at 0.6811 or 0.6745. A fall below 0.6599 is bearish.

Currently running at 0.6670 with the low 0.6632. I think it still on the bearish trend this week, trying to break the previous week low of 0.6494 due to the NZD agresive rate cut tommorow (possible 150bp).

I on this currency have no tender. It is interesting to me. This rate depends on gold or not?

Wtf..., the Dow is down 700 points and Aussie doesn't follow the move. Is the risk aversion forgot about that one?

I hear ya. This thing refuses to fall.

The Aussie sold off much more yesterday, they're just now coming into line. Dow and Aussie are now off equivalent amounts for the week on a % basis.

http://i36.tinypic.com/141ph61.png

Nice call on that, IMO!

Why would the Aussie follow the oil, shouldnt follow the gold?

I was just siting, that in retrospect his call was correct. However, Gold and Oil usually fall together.

I saw AUDUSD as being weak based on chart. Tempting to get long here though on rebound in commodities. I think I will wait to see proof in that first though. I mean this dollar strength is certainly not fundamental, but it is result of much panic, deleveraging and account reserve balancing.

Frankly I do not know what to think anymore. best to wait for clear indications, and figure it won't be too late to make some trade for $$$.

AUD is likely in the process of decoupling. Very unlikely Aussie will have another rate cut this week. Housing market has been given a boost, up to $25k grant now for first home buyers. Also can't imagine why the RBA would be buying up currency at 60c if it had any intention of cutting rates again before next year. We already did 100bp last time, far more than was really needed.

Market strengths will move more and more into Asia as the powerhouse of growth. The EURAUD and AUDJPY are 2 to watch very closely this coming week.

Hey Jade,

Appreciate your insights re AUD since you are raising interesting questions in the context of the current environment of across-the-board rate cut sweepstakes of the various central banks.

Why would the RBA cut 50bp, as the market expects, and then in the week prior to the Rate Statement be intervening to support the value of the currency?

It seems like contradictory thinking on the part of the RBA. But that is just my impression.

And why would Australia be the country to de-couple from the US and global slowdown?

The strategic location of Australia and its wealth of natural resources in relation to Asia is an obvious, but China is not without its problems as the US and Europe are 2 of its most important export markets, if you see my point.

Getting back to Australia's PM from another conversation I did know about the Mandarin and thought that it was impressive and very forward looking for someone to acquire that level of language skill.

Qingwen, ni ye xuexi Hanyu ma? (May I ask, do you study Mandarin also?)

Just kidding, Mandarin was a part time interest for me for a few years when I was living in the US, but have forgotten almost all of it except some elementary things like saying hello.

I know from taking some classes it was very difficult, especially for us from NA.

Xiexie.

Zaijian.

PS - Just came across this link related to the China story of manufacturing stress becoming more acute as global slowdown cuts into exports..

http://www.chinastakes.com/story.aspx?id=772

Hi Roro,

Yes, it is very curious that the RBA would intervene to support the AUD at 60c if it had any plans to cut rates again in the short term. Quite contradictory. AUD is looking more like the happy end of the carry trade at present.

I don't particularly like the look of the gold daily chart btw, thought it had bottomed but it is looking very fragile for more south travel this week.

Check out the EURAUD chart Roro. Awesome looking "M" on it. Will watch that one closely this coming week.

Interesting article link, thanks. I heard the Chinese saying this week they are well positioned because their companies don't take on debt... they self fund expansion. It's to be expected that some Chinese companies will experience problems because of global slow-down (especially those in the luxury extras end of the market, e.g. toy companies), but still on the whole, I think China is much better positioned for growth.

Mandarin isn't within my toolkit as yet. But it is on the back burner as a future quest. Perhaps we should get a room and you can teach me?

I like the Aud for a bull run this week. RBA won't cut anymore and has actually been talking up the Aussie economy. I wouldn't doubt a 500-1000 pip runup in the Aussie pairs respectively. Plus as I had mentioned in another thread the AJ rallied sharply from strong support on the monthly.

Hey Jade,

I'll check that out - EUR/AUD.

My trades are mostly futures and the major pairs. I started trading futures and then followed with currency so the learning curve continues.

Get a room? That sounds interesting. LOL. Do you use PM at FF?

Since you're on the subject of Mandarin the tones are difficult and the script has a difficult logic if you can call it logic, but you probably already know that.

Do you speak any Japanese?

I spent some time in Japan and thought it was pretty interesting, especially since I had just come out of the US after a long stint in Boston, so the contrast was fairly dramatic in ways that surprised me.

You're probably right about China. Makes for interesting discussion.


Dutch Trader,

Why a 500/1000 pip rally? I am asking from a fundamental perspective. Your take seems to fit with Jade's idea that Australia is about to de-couple from the US and EZ slowdown.

Deflation is another nagging issue for me too.

Yes, I have PM on FF (or you can email me). My Japanese is limited to judo terminology and greetings. O soto gari. (My personal favourite move, another of Sun Tzu's fav's as well).

I like Dutchie's take on things for the AUD. We'd be much obliged if all and sundry would quit using the AUD as your shorting play-thing. The frog in the pond is singing again and we would very much like to keep it that way. (The daily chart is forming a nice rev H&S pattern, from the TA perspective, it does look very good for long on all fronts).

Aus is in very good shape economically speaking.

I'll shoot you a PM with am email address.

Keep the AUD perspectives coming, all right. Nothing like getting an education from the insider.

There are of course, no guarantees that the RBA does not have shit for brains. There's no insurance against stupidity. If they do cut, I expect they'll be buying up the AUD at 65c.

Retail sales data out tomorrow, expect it will be positive. One more reason not to cut. Something to watch.