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AUD/USD

  • #69,221
  • Nov 7, 2013 2:50pm Nov 7, 2013 2:50pm
  • #69,222
  • Nov 7, 2013 2:57pm Nov 7, 2013 2:57pm
Quoting Boy Wonder
{quote} Nope you've missed the third possibility: NFP misses and equities don't rally. But they could rally short-term because we're down so heavy today but then they could resume the sell off again next week. I.e. the third possibility is: you can only have an incredibly strong equity bull coincident with by mediocre profit growth and zero or even negative revenue growth for so long. No crystal ball here, but I'm saving some ammo for a snapback tomorrow. Technical damage is done IMO and I think there's more to come maybe next week even if tomorrow...
Yes granted, but at this point with US corporates having piles of cash and not so bad earnings for Q3, I would reserve the third alternative for sometime next year.
Those who say it cannot be done should not interrupt those who are doing it
  • #69,223
  • Nov 7, 2013 3:01pm Nov 7, 2013 3:01pm
Quoting PipTrapper
{quote} {image}

dude, you got some fcked up fantasies
  • #69,224
  • Nov 7, 2013 3:08pm Nov 7, 2013 3:08pm
Quoting lumesh
{quote} dude, you got some fcked up fantasies
Hey I'm not the one with the fantasies.

Check it...

Inserted Video
Those who say it cannot be done should not interrupt those who are doing it
  • #69,225
  • Nov 7, 2013 3:10pm Nov 7, 2013 3:10pm
Quoting PipTrapper
{quote} Yes granted, but at this point with US corporates having piles of cash and not so bad earnings for Q3, I would reserve the third alternative for sometime next year.
Fair enough; but us leveraged traders don't like holding through 50 SPX point downswings in the faith that they will be eclipsed by 200 point upswings
I have no clue what I'm talking about.
  • #69,226
  • Nov 7, 2013 3:11pm Nov 7, 2013 3:11pm
Quoting SpartanTrade
{quote} I see only 2 previous day lows taken out on my charts
Are you not using NY close daily bars?
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I have no clue what I'm talking about.
  • #69,227
  • Nov 7, 2013 3:21pm Nov 7, 2013 3:21pm
Quoting PipTrapper
{quote} Hey I'm not the one with the fantasies. Check it... http://www.youtube.com/watch?v=iwaEydIpS0E

crap...of course...i remember that...my bad
  • #69,228
  • Nov 7, 2013 3:26pm Nov 7, 2013 3:26pm
Quoting Boy Wonder
{quote} Fair enough; but us leveraged traders don't like holding through 50 SPX point downswings in the faith that they will be eclipsed by 200 point upswings
Agreed, but in this case I don't mind holding through 50 SPX point upswings in the faith that they will be eclipsed by 200 (or 300) point downswings

The yellow blob in the lower right is my QE taper target

SPX500 Daily
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Those who say it cannot be done should not interrupt those who are doing it
  • #69,229
  • Nov 7, 2013 3:29pm Nov 7, 2013 3:29pm
Quoting lumesh
{quote} crap...of course...i remember that...my bad
Don't feel bad. We all get them. That's why they have a whole Neuroscience center dedicated to their study
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Those who say it cannot be done should not interrupt those who are doing it
  • #69,230
  • Nov 7, 2013 4:57pm Nov 7, 2013 4:57pm
Quoting Boy Wonder
{quote} Are you not using NY close daily bars? {image}
This is what I see
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  • #69,231
  • Nov 7, 2013 5:05pm Nov 7, 2013 5:05pm
Thank you PipTrapper, you are genius.

NFP will decide the daily chart to be a HS pattern or W pattern.
  • #69,232
  • Nov 7, 2013 5:29pm Nov 7, 2013 5:29pm
Quoting RodMca
{quote} Correct me if I'm wrong but is this a cup and handle formation on NZDUSD? {image}
It's starting to look more like a potential bearish head and shoulders now. :nerd:
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Those who say it cannot be done should not interrupt those who are doing it
  • #69,233
  • Nov 7, 2013 5:38pm Nov 7, 2013 5:38pm
Quoting zew
Thank you PipTrapper, you are genius. NFP will decide the daily chart to be a HS pattern or W pattern.
If I need something translated to Chinese, I will let you know.
Regarding NFP tomorrow, I am positioned (and hoping) for a better than expected number, but also hedged for the worst... so let the chips fall where they may.
Those who say it cannot be done should not interrupt those who are doing it
  • #69,234
  • Nov 7, 2013 5:41pm Nov 7, 2013 5:41pm
AUDUSD is presented with very large skew vs. fair value on a YTD view.

chart is of AUDUSD vs 5 year yield differential.

Taking data from this time period we can see the relationship of higher interest rate differential = higher AUD, we can see the regression output and the r^2 value is 78% which presents us with a great model to use as shown by the linear regression.

As it stands, modelling on this maths we can determine that based on the belly of the curve interest differentials we are trading at a ~500 pip discount. While of course the Interest rate diff can fall and AUD not move, if you can trade bonds then this is a blindingly obvious trade but even without, there is potential for AUD strength here.

This being said, I am not long. yet.
Attached Image(s) (click to enlarge)
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  • #69,235
  • Nov 7, 2013 5:46pm Nov 7, 2013 5:46pm
Quoting JeremyWS
AUDUSD is presented with very large skew vs. fair value on a YTD view. chart is of AUDUSD vs 5 year yield differential. Taking data from this time period we can see the relationship of higher interest rate differential = higher AUD, we can see the regression output and the r^2 value is 78% which presents us with a great model to use as shown by the linear regression. As it stands, modelling on this maths we can determine that based on the belly of the curve interest differentials we are trading at a ~500 pip discount. While of course the Interest...
Nice chart. Thanks for that. In the bond world this would be a potential compression trade.... but like you said, would it be a drop in yield differential or a rally in the Oz?

Say, you would happen to have the same overlay for the 10 year yield diffs?
Those who say it cannot be done should not interrupt those who are doing it
  • #69,236
  • Nov 7, 2013 6:08pm Nov 7, 2013 6:08pm
Quoting PipTrapper
{quote} Nice chart. Thanks for that. In the bond world this would be a potential compression trade.... but like you said, would it be a drop in yield differential or a rally in the Oz? Say, you would happen to have the same overlay for the 10 year yield diffs?
oh for sure, fixed income traders see this as a decent compression trade as you get carry from the bond trades which will be > than FX swaps (only just), but it depends where you start the model / where you base the chart from. I'll demonstrate by showing the 10 year diff as you asked (but for AUD, due to yield curve, 2's or 5's has the highest R^2,and therefore best to use)

Scaled from Jan 2012 you can see the AUD is barely undervalued

But scaled from this year, the AUD is very undervalued, so its also dependent on the timeframe a trader considers.
Attached Image(s) (click to enlarge)
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  • #69,237
  • Edited 6:44pm Nov 7, 2013 6:28pm | Edited 6:44pm
AUD is undervalued or overvalued ? It depends on when you looking at this price from which angle.

1.07 was not overvalued, 0.89 was not undervalued, even 0.61 was not undervalued. China printed 4000B RMB in 2008 , local goverment loaned more than 17000B RMB from Bank to invest on infrasturcture and US goverment started QE1, QE2, QE3 which boosted AUD from 0.61 area to 1.1 area.

If we just read technical charts, I agree current price comparing to history is undervalued. However, factors that push AUD from 0.61 to 1.1 are fading, what would happen next?
  • #69,238
  • Nov 7, 2013 6:34pm Nov 7, 2013 6:34pm
sigh
  • #69,239
  • Nov 7, 2013 6:41pm Nov 7, 2013 6:41pm
当矿业迅速衰退，澳大利亚需要其它行业来填补出口和就业的空缺。 由于过去10年迅速上升的汇率使得澳大利亚劳动力成本非常高，这使得制造业几乎没有生存的空间。但是，过去这些流失的工作岗位，被超强的矿业吸收。

现在矿业不断裁剪劳动力，制造业早已凋敝。澳大利亚需要其它行业来支撑经济，特别是农业，商业以及地产。农业出口意味着澳大利亚必须降低汇率来和新西兰，巴西竞争。商业需要低利率以及低汇率。地产需要更低的银行利率，以及汇率来吸引海外投资。
  • #69,240
  • Nov 7, 2013 6:45pm Nov 7, 2013 6:45pm
Quoting zew
当矿业迅速衰退，澳大利亚需要其它行业来填补出口和就业的空缺。 由于过去10年迅速上升的汇率使得澳大利亚劳动力成本非常高，这使得制造业几乎没有生存的空间。但是，过去这些流失的工作岗位，被超强的矿业吸收。...
seriously buddy. English please
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