AUD,NZD/Flows and Orders/FXWW News

AUD edging higher as PBOC eases credit squeeze

Those in the know also suggest that the ‘plunge patrol’ was busy in the Shanghai share market yesterday afternoon, entering the market when losses hit exactly 20% from the absolute highs.

The AUD/USD has been used by the hedge fund and CTA communities as a proxy trade for the Chinese credit crunch and the easing of the cash squeeze is likely to trigger some modest profit taking (and also to increase the size and proximity of trailing stops).

I’m still running a large-ish long position but am looking to start booking some profits and reduce my risk on intraday rallies. I have a small sell order in the market at .9315, just ahead of prior lows, and just in case the bears manage to hold on. (Edited, sorry wasn’t too clear the first time 🙁 )

  1. Aud/nzd got close enough for me to 1.2 I am out. Will wait for next opportunity. I am now fancying chf crosses, started to build long eur/chf. Will see how that one would work. Cheets

  2. Hi Sean, this is confusing. Thought u have been bravely bullish on Oz all this while but now you have turned short instead? What about the minimum rebound to 0.9665 that was purported? Time to abandon this pair for you? Thanks.

  3. Hi Sean,

    I’m a complete green-horn to FX trading but have been following your blog for a few weeks. I just wanted to know what you meant in your last paragraph. Does that mean your going short if the AUD/USD pair hit 0.9315. If so where do have your stop at?

    Cheers.

  4. Apologies, let me re-phrase. I am long and have been since last week. I will reduce my long position at .9315 by around 25% just in case it cannot break higher. That will allow me scope to re-buy at 9200 just in case we get a period of range trading

  5. Marc, the downtrend is strong so selling at technical resistance is a viable strategy. Previous lows now become resistance so 9325 is a viable entry for bears, keeping stops tighht-ish, say 35/40 pips maybe?
    But I don’t advocate this strategy, I think we go back to 96/97 overall in coming weeks. But I’ve been wrong before 🙂

  6. Oh I see. Thanks for your clarification, Sean. For a moment I thought Oz has lost a strong credible bull in you which will be disastrous! 🙂

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