AUD,NZD/FXWW News/Trade Ideas

AUD/USD: Looking for new trading range .9000/.9250

Despite the very weak technical close below .9140 on Friday, AUD/USD hasn’t managed to break any further this morning. The early interbank market had a few goes at the downside but we are basically beginning the week where we finished the last one. Chinese PMI is the major risk event on today’s economic calendar and of course there is the RBA tomorrow.

  • AUD/USD traded very bearishly on Friday afternoon in Asia (see story) and the technical outlook certainly looks bearish for a test of levels below .9000. 
  • AUD/NZD also looks bearish and I think we are in a short-term consolidation phase between 1.1750/1.2000 before further falls eventuate.
  • AUD/JPY and EUR/AUD are giving the AUD bulls some hope; strong technical support at 89.50 is still relevant (see chart) and EUR/AUD has spent another week below 1.4400 (see chart).

I would suggest that we sit back and watch for a few sessions, trading 150/200 pip swings in AUD/USD. The price-action on Friday was very bearish and we will need to figure out whether this was a one-off related to big end-of-month flows or if it was the signalling of bear-trend strengthening.

  1. Morning Sean, Missed your updates on Friday to my cost. Stopped out of medium term longs on AUD. Falling knife still. On that front I note the IMF announced Friday to separate CB holdings of CAD and AUD (unbundling them from previous reports). Apparently the USD$98 odd billion was a lot less than expected. Views?

    I am also intrigued by the price action in the PMs. I am waiting for gold to show signs of capitulative lows which may be in the process of finding.

  2. Agree on Gold James, but need to be patient and willing to miss bottom by few %. The NZD is starting to find demand during Asian session again and even though overseas speccys are still selling, it does look like it wants to base. Sorry no strong view re IMF, but I hope they need to buy some A$ 🙂
    Price action was very bearish Friuday afternoon but that might be to do with big flows, need to wait a few sessions

  3. OK thanks.

    I didn’t express the IMF info properly. Apparently the AUD and CAD reserves of the world’s central banks used to be reported together (under the heading “Other Currencies”). They now have their own line item and were only USD$98 billion for the AUD reserves of central banks around the world – which was a surprise for some. Seems interesting for its own sake – but not for portending any particular action in the markets.

  4. Hi Sean, still stubbornly holding my AUD long. Seems foolhardy, I know but I still have a profitable AUDCAD long that covers the loss so far. But I won’t take another AUD long at this point, like you, preferring to wait a few hours to see what happens. I suppose the next major support for AUD after 9150 broke is 9100 and then 9000? Do you think it is more likely to hit 9350 or 9000 first?

  5. Hi Gus, lot depends on next few hours but I still prefer the long side at these levels. The bears have obviously no need to panic just yet, but the short-term mkt is short so I’m much more comfortable being long at moment

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