AUD/USD

yes, that type of analysis may give you some good clues... bond rates/yields/yield curves have proven to be some statistically viable ways of measuring the likelyhood of whether something is being valued "properly"

but, what if I told you it is absolutely 100% guaranteed already priced in, because I'm the chairman of the RBA, and I know my stuff.

My super informed, most qualified opinion won't mean a darn thing if a rate cut is announced, and the market tanks 300 pips in an hour.

BUt yet, if one just waits, and sees that once a rate cut is announced, that by the end of the day the market is actually trading higher...

well, the only way that can happen is if there are more aggressive willing buyers at those prices, and not enough willing sellers to fill them all.

Therefore, you can make an almost airtight, bulletproof argument that, indeed, it is priced in. AND.... it is also right now "cheap"... and thats why it has started to move up.

NOthing like logic and observation as the bedrock of a trading system.

X

thanks! the charts really do tell you everything

I have a few positions that are long AUD (short GBPAUD) that I think I'll hold over the weekend but close partial before the RBA announcement, the reaction has always been so unpredictable

The fact is, if a rate cut occurs, and the market starts moving up to close above todays high... and does so within a day or two.... There is really very few better indicators that this market is about to have a very significant retracement to the upside. So, getting in a day later probably won't matter much in the big scheme of things. considering it could end up making between a 30-60% retracemen from the Feb highs.

And of course, if this doesn't happen... you'll know getting in longer AUD is rather silly, as obviously there are lots more people who desire to sell than buy right now.

I actually would be quite surprised myself if a rate cut occured but the market couldn't sell off.... I think this is unlikley.

But i'm not gonna put my money down until what I think is not speculation, but clear and obvious conclusion.

Anyone here trading EUR/AUD? Any views on it?

a long around 2765 with a 40 pip stop and target, and moving stops to BE +3 pips if we could hit 30 pips would be something i would consider taking.

I like the discussion. I'd be a long term bull on AUD and even I'm having issues with it lately. There are a lot of negatives out there, but at the end of the day, I'd still rather have a large chunk of cash earning 5+% in Australia, than to move to the USA and earn < 1%. There's clearly some support here, even though it's cracked parity. It doesn't seem to be dropping hard as it has in the past. I'd love to see some upside too. And again, fundamentally, there's no point in moving AUD to USD to go from earning 5+% to < 1%. And the RBA is not the FED. If past performance is any indication, interest rates in AUD will go up, not down. I'd love to hear some feedback from you all on this.

The USD is the currency in which all the deals are being made, so when the shit hits the fan and the other party needs to pay up, they sell off and collect USD to cover. All the money is in New York. That's all you have to remember.

Risk on - risk off. Lots of negatives aside from the horror of US data today. Derivatives need to be covered. It's all falling apart. Run for your lives! But seriously, things are tough all over.

Just stepping out Top, or I'd really like to give you my best answer, but what immediately strikes me about your post is it gives me the vibe that your sorta "married" to this position. And, it seems you suspect your new bride might be a'cheatin' on ya behind yer back... but, your choosing to overlook that... Maybe I'm off here... but your in a trade it seems, and your listing reasons why you believe it should work.

However, when it comes to listing reasons to get out... you don't really do that. To your credit, you do seem to acknowledge that the recent action has not been to your favor... but you fail to expand on exactly why you think this is the case. I mean, lets face it, theres nothing scarier than the euro in terms of the capital markets right now... and yet, over the last 2 months, the euro has gone UP against the aud!

Also.. I get a sense from your tone that your saying price is slowing the drop...but you REALLY mean: "$hit. we are under parity, and that's gonna likely provide some pretty darn significant resistance on the way back up... IF this drop actually stops, and moves back up. Sigh... i'm in this trade from a much higher price, and parity used to be my stop.... but.. well, this HAS to find support soon, because the fundamentals support it to well! right??"

Maybe i'm way off here, and the details are probably wrong, but I get a sneaky suspicion that you have a LOT of compelling reasons to get in the trade...and as of now... your stuggling to line up those reasons because many are not what they used to be. I feel this way because I remember how I would sometimes sound as I tried to tell myself why the trade i was in was still a good trade (usually i was wrong whenever this happened)... and the reasons I gave sound very much like your post here!

And please call me if i'm just talking BS here. I'm not gonna speculate any more than this, because i'm probably wong on a lot of counts here and I don't want to get off topic.

Personally, If it weren't for the EZ crisis... I would love a long AU.

But, China is really...REALLY starting to show that it's emperor may lack in attire, financially speaking... and the numbers are starting to come out that show China is indeed starting to show evidence that it will not hold up as well as they want everyone to think.

By no means does this mean china will go to hell in a basket....

but the air of uncertainty and concern is becoming pervasive. and even though it may be so illogical, considering china is growing at some stupid rate per day.... logic doesn't matter much here. its only what hte investment community feels, and then acts on, that matters.

TO cut to it, i'm concerned about china... i'm very concerned about the E.U. I am not super comfortable with the RBA, and I know that the rate of decline in AUD to USD value has outstripped by far whatever ROI cash investors will get in the bank... and this will create a disincentive to invest... which will reduce the valuation eve more... in a cycle...etc.
I also hate the trend down.

I like the interest rate, I love the overall relative stability of their economy. I like their relationship with geo-resources, particularly metals, and I like the level aroudn price is holding right now... and I like the possible bounce that risk markets may have already kicked off post NFP.

It's my favorite risk market. But I think it's an island of relative fiscal strength amid a world that is economically terrifying... unfortunately, it needs that world to remain strong... and as the EZ situation worsens and china continues to post disappointing numbers... the AUD is probably not out of the woods yet.

Set a stop. be prudent about it... you can always get in whenever you see powerful evidence that it will go up. This is always way better than holding onto a losing trade, and choosing only to recognize the evidence you want to see.

Just some thoughts.... don't take 'em personally.

X

Since EUR/AUD topic is dead (or practically non existant) I will post this here. If it bothers anybody i'll edit it out.

I've decided to short EUR/AUD at resistance 1.2810. I believe further decline is to be seen continuing the downtrend on higher timeframes.

I believe AUD is strong fundamentally and soon enough we will see either an aclimatisation to risk or some news that will trigger risk on reactions (maybe hopium) and bring AUD up.

What are your views on the fundamental mechanics of EUR/AUD?

how long until the market close?

A morning star has formed on daily chart. Bulls will have upper hand next week.

It depends on which brokerage firm you are trading with. Some closed at 4 pm while others close at 5 pm.

i got halfway through this an fell asleep, why are u telling us your life storys for?

I'm not.

And it's likely not a relevent post with regards to your expectations of what this forum is aimed at providing.

what do u reckon ? (o)_-

If you bash people you won't get signals anymore...

I'm not trading. But I do watch the market, and I come back to this forum every once in a while to see what you guys are up to.

As for holding a position, it's either AUD or USD, and my time frame is always greater than this month / next month, as opposed to today / tomorrow.

Well let's start with negatives:
Basically everything sucks.

And now for the positives:
AUD earns a real % interest rate.

As for flow, we know everything gets sucked back into Wall Street via the insanity of derivatives and everything denominated in USD.

In the short term I'd expect the AUD to go lower, but it hold pretty strong relative to past moves.

China: Interesting. Don't forget they are now a primary dealer. Most likely to conceal the USD dump they're about to perform. Will they trade in their huge coal imports for gold imports? Will Australia still benefit? They've been diversifying for years now.

Really, without going into too much depth in a single post, the only reason I see to hold USD at this point is to retain the value earned while everybody get sucked back into the USD. I certainly don't think it has anything to do safe haven. I think it only has to do with demand to cover losses on other trades.

I guess a few / a lot of people got caught by the NFP whipsaw and subsequent long move last night.

I'm currently looking at my daily AU chart, and it seems there is a possibility that a 2nd bottom is being formed (if you take yesterday's daily chart as a fake out - 1st bottom was formed on 23 May 2012.).

However, taking into account June 17th (that still gives us 10 trading days - for brokers that stop their servers over the weekend), and I'm thinking there is a possibility for a triple bottom formation to happen. Or the whole formation might need the whole month of June to get completed.

So, before I get shot for saying things without justifications, here there are.

1. Technical Analysis -The overall downtrend is still valid. There was a consolidation period that happened in April 2012, before the trend resumed downwards and re-entered the bearish channel sometime in Mid May, and so far the daily candles have respected the upper trendline i.e. everytime it touches it, it bounces off like a superball.

2. Fundamentals - Of course we still have the EZ crisis still raging on. This in itself is a strong reason to keep the sentiment bearish. Bankia's issue is still not solved, Spain overall as a country is still in bad shape and EZ overall economy is just currently f*d up. Adding on to the reason why we should keep this sentiment is that China is showing signs of slowing down (recent data hasn't been great).

So, why should we be careful of a potential reversal (remember I'm not calling a double bottom but a triple bottom - which is a stronger reversal pattern - see the triple top formation that happened in February 2012 when people were saying that AUD will continue to rise to 1.1 and beyond).

1. Technical Analysis -Right now the move downwards is being countered by a higher probability of QE3 being drawn up by Fed. This coupled with a strong support around the area of .9600 - 0.9575 - this so far has been confirmed with the violent rejection that came once the area was breached.

2. Fundamental Analysis - Personally, I don't think there is any good news out there to reverse the trend (obviously QE3 - but I don't term it as good news). For me, it's more of the fact that the politicians will take certain actions (US Fed - QE3, China - Additional Stimulus (might be bad for the Chinese Currency, but should be great for AUD), EZ - implementation of ESM, the deposit insurance scheme, bailout of Bankia through some form of Mechanism that they will identify, and most probably, ECB to start purchasing sovereign bonds.). This doesn't take into account the possibility of a pro-bailout Greece government being formed after June 17th.

So, how do I plan to trade the potential triple bottom? Easy.

1. I will exit all my current shorts once the second bottom has been completed and the third bottom is in the process of being formed. Targeting around 0.9600 for my TPs.
2. I will put a sell stop around 0.9500 with TP unknown
3. I will start putting small long positions and add on to it once I get confirmation of a trend reversal (a clean break and close above the bearish trendline from 1.08 earlier in February 2012).

Any thoughts on this?

5% interest rate is great... sort of.

Assume you are an American with xUSD to invest, you buy xAUD which earns 5%

The AUD drops from 1.07USD to 0.96USD... a loss of 10%

I was pretty good at maths in school, but I don't need knowledge of Maths to work out that our erstwhile American investor just got screwed. Simple arithmatic will do.

He makes 5% interest on an investment that has lost him 10% hard currency value... a 5% drop in 12 months, PLUS he must pay tax on the 5% if he banks it.

He has 2 choices now, he MUST leave his investment locked up indefinately hoping that the AUD recovers at some unkown time in the future, or cut his losses, cash out, and lick his wounds.