AUD/USD

On the 15min chart, I see a penant flag formed with it testing the bottom support line, getting close to the point of the flag now, anyone of you gurus suggest which way it may go?

Cheers and all the very best for the new year!!!

Not a guru but I say it will be heading DOWN

Thanks Daytrader

Is that partly due to most of the indices going down last night?

No that's what I see from my charts

AUD
AUD traded lower tracking weaker equity markets and the decline in commodity prices. AUD price direction is
closely to correlated to the outlook for the global recovery and risk sentiment. Today's decline in equity markets
contributes to a decline in risk appetite and sparked liquidation selling pressure in AUD. Tuesday the AUD traded
sharply higher supported by firmer equity market trade and rising copper prices. Trading conditions remain
extremely thin as we approach year-end. AUD had been experiencing significant selling pressure sparked by
diminished RBA rate hike speculation and concern that recent RBA rate hikes have contributed to weaker than
expected domestic growth in Australia. At the start of December investors were looking for the RBA to hike rates
by 50 bps in February. The trade now is looking for the RBA to pause in its tightening cycle because the
sustainability of the economic recovery in Australia is less certain. AUD downside was limited by gains in cross
trade to the JPY with JPY pressured by concern about Japan's sovereign debt rating and declining Japanese
bond yields.
This week's Australian economic calendar includes the December 31st release of November private sector credit
expected up 0.1% compared to flat last month.
The technical outlook for the AUD is mixed as the AUD traded above 8950. Expect AUD support at 8783 the
December 24th low with resistance at 9070 the December 16th high.

Some thoughts on the US economy in 2010
The general consensus of economists is that the US will experience 2 to 2.5% growth in 2010
with equity market gains limited to single digits and the USD likely to post a modest recovery.
Aggressive fiscal and monetary stimulus from the Fed and US government helped to stabilize the
financial markets and end the US recession. The USD posted 2.2% growth in Q3. The rise in US
Q3 growth reflects an increase in consumer spending sparked by government programs like the
cash for clunkers and tax credit for first-time homebuyers. The rebound in US GDP was primarily
fueled by government action. It is not clear that the recovery can be sustained when these
government programs expire and the Fed begins to withdraw stimulus. There is a great deal of
uncertainty about the outlook and sustainability of the recovery for GDP in 2010. In the past, deep
recessions historically lead to strong recoveries. Financial crisis produce weak recoveries.
Because the global recession was caused by a financial crisis the GDP recovery may be weak.
One of the major headwinds to US growth is the risk that the US unemployment rate will remain
elevated throughout most of 2010. According to Blue Chip Economics 1.1mln jobs will be created
in 2010. Because the population is growing at a rate of 2mln per year 1.3mln jobs are needed just
to keep up with population growth. This means that the US unemployment rate may hover around
10% for most of 2010. According to Career Builders.com one-fifth of US employers plan to add
full-time jobs in 2010, this is up 14% from last year, just 9% said they plan to cut headcount in
2010 and 61% plan no change in staffing. A number of economists suggest that the headline
unemployment rate may actually continue to rise as the labor pool is shrinking and many
unemployed who run out severance try to come back into the workforce. Continued high
unemployment will limit consumer spending. There is doubt of whether the increase in consumer
spending during Q3 will continue in 2010 as government support plans expire. The US savings
rate has been rising as consumers try to reduce debt burdens and fear becoming unemployed. If
consumers continue to increase saving it will add an additional headwind for the US recovery.
There are some reasons for optimism about the potential for a brisk recovery in early 2010.The
manufacturing sector continues to show improvement. US industrial production has posted
growth in three of the last four quarters. Greg Ip writes in this week's Economist that there are
number reasons for optimism about the US recovery in 2010. One is the fact that business
inventories are deeply depressed. The restocking of inventories will boost factory production.
Chicago PMI for December rose to its highest level since 2006. Another potential positive for the
outlook for the US economy is the rebound in US housing market. The US housing market has
improved and shows sign of stabilization. According to Ip the housing market will benefit because
the inventory of new homes are at their lowest level in 17 years. The outlook for housing remains
uncertain. A number of analysts suggest that the housing market remains weak and that the
recovery was driven by foreclosures and short sales. The Fed announced plans to add additional
support to government mortgage agencies (Fannie Mae, Ginnie Mae and Freddie Mac) and the
tax credit for first time home buyers has been expanded to April 2010. This could keep the
recovery in US housing market going during the first half of 2010. It is uncertain what happens to
the housing market when the Fed stops buying mortgage-backed securities next year.
Another positive for the US economic outlook is that capital spending is expected to rise. Ip
suggests that with capital spending at 40 year low there is nowhere to go but up. He also expects
continued support for growth from the Obama administration's 787bln stimulus plan. The
remainder of the stimulus money is expected to be gradually dispersed in 2010.
Sustaining US recovery in 2010 will require an increase in private spending and income growth.
According to Ip increased US savings rate and high unemployment will limit consumer spending.
In addition, consumer debt burdens remain high and could become more costly as interest rates
30 December 2009 rise in 2010. Rising interest rates coupled with the withdrawal of fiscal and monetary stimulus will
reduce GDP growth and increase the risk of a double dip recession in mid-2010. If recession
returns midyear, unemployment would likely surge and we could see an increased risk of
deflationary spiral in the US. Because interest rates are already at zero and the budget deficit is
soaring there would be few policy options to respond to a double dip recession. Also there is
significant opposition in the US to increase government spending because of the record US
budget deficit. President Obama may not want to take the political risk that could emerge if the
administration calls for a second stimulus plan to sustain the recovery. Some economist’s
question how effective the stimulus plan has been and the cost of a new stimulus plan would
likely be met with significant opposition from deficit hawks.
Additional risks for the sustainability of the US recovery in 2010 include continued low-level of
lending by banks and the prospect for new financial regulation. Despite interest rates near zero
and large government bailouts bank lending to businesses remains weak. Obama administration
officials are encouraging banks to lend. Regulators are expected to raise capital requirement for
banks and this may also hurt lending and slow the pace of the US recovery. The proposed new
regulations on financial institutions seem to be at counter purposes to the administrations call for
increased lending.
The final wild card in 2010 is the uncertain outlook for inflation. If the stimulus is not removed in a
timely manner the combination of massive government spending and the huge increase of the
Fed’s balance sheet could boost inflation as the economy gains momentum. The Fed currently
does not see an immediate risk of inflation but expectations could change quickly in 2010 if the
economy grows at a faster pace than most analysts expect. Look for a fairly brisk US economic
growth in early 2010 and growth will likely weaken in the second half of the year. Calls for a new
government spending to combat the risk of a double dip recession could spark renewed selling of
the USD in the second half of 2010 as fiscal worries re-emerge. Happy New Year!

Strong support level is .8900 and its heading upward target is .9010.

Next week is bullish for AUD/USD.

AUD/USD intraday: key ST resistance at 0.899.


Pivot: 0.899

Preference: Short positions below 0.899 with targets @ 0.8915 & 0.8855 in extension.

Alternative scenario: Above 0.899 look for further upside with 0.9025 & 0.905 as targets.

Comment: even though a continuation of the technical rebound cannot be ruled out, its extent should be limited.

Key levels
0.905
0.9025
0.899
0.895 last
0.8915
0.8855
0.8815

AUD/USD: Support From AUD/JPY In Well Defined 0.89/0.90 Range Sydney, December 31: The AUD/USD dipped towards 0.8900 a few times on Wednesday, but good buying ahead of 0.8900 and bouts of AUD/JPY buying from carry-trade seeking investors underpinned. The AUD/USD is set to close the US session not too far away from Tuesday"s 0.8945 close while the AUD/JPY continues to trend higher and has closed above the top of the daily ichimoku cloud for the first time since December 7.
Trading in the AUD/USD during the Asian session should be very quiet for the last day of 2009 with Tokyo out on holiday and the 0.8900/0.9000 range clearly defined by decent size orders. Technical support is found at the 100-day MA around 0.8895 while the key 21-day MA and the base of the daily ichimoku cloud between 0.8990/0.9000 should provide strong resistance.

Strategy: [email protected] An inside day yesterday, as the price consolidates below the cloud. The price action leaves the daily studies net positive, with a fresh bullish cross on the MACD, while the hourlies are in neutral territory. Our bias is up, with the recent trend and our strategy is to buy a dip towards 0.8900 or a sustained 0.8995 break.

Well, I've watched my profits on this trade go up in smoke...

But that's all right, there is always another trade around the corner and here it is....

adding 2 more lots short up here @ .7230, stops over .7340

that's 4 aussies short & 3 kiwis short now....

As the great Pat Green sings: "Here we go"

Yes so now all we need to do is shake that money tree so we can get a new year's present

Are you short either or both pairs DT?

These trades won't pay for new years unfortunately. I don't see them hitting tasty profits until end of next week. They will buy a hell of a valentines present though.

I'm only short 2 lots aussie , and yes I know they wont have a decent amount of pipis until next week or a few weeks after....I'm in a forward trade anyways so either way I'm still getting interest until I do TP

Best of luck to us both.

News at 11:30 Sydney time should not be good for AUD. I am certain it will drop but by how much it could be anybody's guess. Good luck to all us bears

What news ??

Yes all we need now is for someone to shake that money tree

I am short too and not that impressed with today's effort so far.....DT that info you gave us where is that from or is it yours?......All the best to everyone for New Years and here is hoping all have a very profitable 2010..

Private sector credit....rises 0.1% mom ( as Expected) 0.8 %YoY (v's 0.9% forecast) in November

From my broker