Spider's Den

I think the AUD is range bound around 8030 to 8300 range for now. So a mid-point seems about fair value for now in my opinion, its had a bit of haircut so to speak from last year without any rate movement.

Bond markets have priced a 0.5% cut, but AUD/USD has probably priced some of that cut already.

In my opinion, the RBA is aware of the low risk fee rate and doesn't want to fuel a bubble in real estate, so even if they do cut rates, it will be 0.25% with a sit and wait for a while. Bank economists over here are spruiking a rate cut more so now, but I often think they have an incentive to do that as rate cuts stimulate banking activity.

Despite lower commodities prices, we are exporting a lot more commodities than before, and that will create an underlying demand for the AUD, so I don't see it hitting the rock bottom (5000 range) of the early 2000 era (as I don't see the Fed raising rates too high either).

My worst case downside for 2015 is to 7500 with RBA 0.5% rate cuts and the US fed raise to 0.4%. It will take 6 months for this rate differential to occur at the earliest, so I expect sentiment to move up and down until they play out.

I study the Copper market daily, and this is a commodity that is a barometer of economic activity. They expect it to be in a small surplus this year, its used for construction and electronics of all sort, if this starts to drop rapidly in price then I'll really start to get worried, but its pretty firm around USD2.5/lb where miners can make a good margin. Copper is not a major export of Aust, but its a bit like Oil as a barometer of economic activity, it just hasn't got the oversupply of Oil. Oil is in demand, its just that the price and overall economic activity has been clouded by supply led technology I that commodity.

I think the RBA will wait and watch to see what happens in Canada. I may be wrong, but this is my best guess for now.

links for ecb meeting

http://www.bloomberg.com/tv/livestream/

+

http://www.ecb.europa.eu/press/tvser...150122.en.html

Its become a bit of trend that the AUD gets dumped when NY Opens.

Yes, noticed that.

Also GBPUSD is being both sold and bought on every rally/dip. I am on this pair definitely atm.

Good inputs! Copper as a commodity with all commodity i think are good leading indicators

I was hunting on EUR/AUD for first leg, then onto aud/usd for second. squared now.. could have gotten quite a few more pips, but well, human with emotions is a fact. need to control those

I tried to play a breakout here on EurUSD targeting 137x (weekly resistance) triggered at break of rebound level after ECB meeting
nothing fancy just trying to learn

Gold

Gold in USD terms is on a long-term downward channel as per the attached, and it will retreat from its current highs in my opinion starting in the next couple of weeks.

Gold price can retreat slower than it can rise, people flock to gold when there is "uncertainty".

Markets were faced with a number of “uncertainties” of recent, including:

1. ECB stimulus and Europe recession,
2. Greek Exit/Default/Elections,
3. Oil price drop,
4. Base metals price drop,
5. US Equities heading into just above fair value (SP500 PE Ratio of 19),
6. Chinese slow down.

All of these events will blow over and become less uncertain.

My general market expectations:

1. China will continue its Investment driven binge, there will not be a hard landing any time soon, but perhaps a soft landing could be expected. The price drop in commodities will help their businesses expand wage growth and gather motion towards a greater Consumption % of GDP.

2. US Earnings in the next quarter will be very interesting, as 40% of the revenues of SP500 companies comes from Europe. A strengthening USD may reduce Future PE ratios.

3. US Fed to raise rates, but it will be no greater than 0.4% for a long while. The US economy is in serious debt, it can't afford to raise rates too high or too soon.

4. Despite stated 3 above, US share market returns during the year ending "5" in each decade has the greatest return. I expect this to continue.

5. Cash injection to Europe will start another wave of asset bubbles if not controlled properly - equities and real estate. When rates are too low, the money goes into riskier investments.

6. Confidence clearly returning in the USD and the banking system.

7. The main issue I see in the near horizon is "deflation", which is not good for economies with severe leverage. So on that basis, I expect QE type stimulus and low rates to be a part of monetary policy across many economies in the interim.


Gold Outlook:

1. There is a re-distribution of gold reserves amongst the Central Banks, China has been building their gold reserves which is not being reported. They will jump from holding 1000 tonnes to +4000 tonnes, they are buying gold directly from Mines they own. Russia has been buying gold for most of their Oil contracts of the last couple of months. This is proof of Central Bank appetite for Gold.

2. All-In-Sustaining Costs of mining gold is approximately USD900-1200/oz for most mines. A lot of mines report their gold cash costs, but this is not a very good measure as the capex spend is usually excluded and is quite high. Also, due to the higher gold price of recent years, many mines have had their mine life extended through exploration into underground mining extensions, which is riskier and more expensive to mine. If gold retreats below a spot price of USD1000/oz, then I would expect a squeeze on the high cost operators and supply. Central Banks have appetite for gold in their reserve holdings, so I therefore think USD1000/oz is a reasonable lower range target for the next couple of years.

3. There is confidence in the monetary system and the USD for the interim, and as the uncertainties above become “known” outcomes then this will cause the gold price to slowly retreat again to USD1000oz in the next year.

4. US Fed have been leasing US Gold reserves and Gold reserves they hold in custody for other Central Banks. The German public raised concerns about their Sovereign gold holdings held by the US Fed, and the US Fed indicated it may take 8 years for all their gold to be repatriated. Again proof that the public acknowledge gold is money.

5. If a Gold standard returns, very unlikely, expect Gold to jump significantly in price in USD terms.

Trading Strategy:
Start taking short positions on Gold in the next couple of weeks with adequate stop loss protection. Execute at any intra-day highs.

TP reached, that was fast... maybe it was just luck

Corrective move on EUR/USD today?

I suspect once NY goes online it will get sold down again. Going to sit on the fence and observe.

EUR has literally gone down the toilet against USD. Imagine when NY Opens. 1.1150 could hit.

Excellent view !

I agree. This is a total free fall. I have 1185. I would like to see some bigger pullback then its 1min pullback.

NZDUSD is trapped in equidistant channel and pullback to POC could be shorted towards 7395. 7540-7550 is the POC for short trades. In that case we have another trend pullback chance to trade. If 7460 breakout happens before any pullback to POC, the pair should touch 7440 before new sell off or another pullback.

Any Options traders here?

I was looking at Gold OTM Call Options 3 weeks ago, would've returned 1800% by now... Cursing.

I'm looking for a bullish OTM Call Option.

I was thinking German 30 Index at 11400 strike March 15 Expiry. Its had a top run, but this depreciating Euro will make their export industry go through the roof.

There is a options thread aroundhere, called "lets trade options!" by the fool.

NZDUSD breakout making its way to the target. EURUSD free fall continues

wow 1.1114 on eu.. Soo fast.. 1.0997 then 1.07, I see nothing else here

Surely its hit its bottom! Sharp retrace happening

There might be more, its not done yet.
price is still very choppy, from crosses.. its going to hve a whip i feel.. i still cant tell true buyers and sellers.. need beware if placing trades...