AUD/USD weekly preview, October 14th: Stronger CNY and SGD could foster short-covering

     There is a fairly clear downtrend in play here but the signs are strong that this pair’s recent fall is running out of steam. The inability to hold losses below 1.0165 was one sign and another was the fact that the pair rallied despite worse-than-expected jobs data. There is still solid selling interest near 1.0300/20 and this is most likely speculative players adding to existing shorts. Latest IMM data showed that market longs had decreased by 30% in the week up to October 9th and prime broker reports say that the professional market is already short. More dovish news-wire comments from RBA Chief Stevens saw the AUD fall in late NY trade, triggering intraday stops below 1.0235. Stronger than expected weekend Chinese data should ensure that the AUD begins the week on a slightly bullish tone. The CNY has been trading at record highs near the base of its 1% trading band against the USD, and the MAS has been intervening heavily in order to stop the SGD gain. Both of these factors should help AUD sentiment this week, with the first big risk event being Tuesday’s release of the meeting minutes. Bids are reportedly solid near 1.0180 and the breakdown level at 1.0310/20 remains the level to watch on the topside; play this range and expect momentum to increase markedly on a break.

  1. Hi Sean,

    Would like your take on the pound. My feeling is the minutes could sound hawkish to keep inflation down taking pound back to 1.63-1.64 area before gradual fall beginning PMI’s due for next month.Its very fundamental with no technical aspect working at the moment.

    Hope your venture is working well and hope you do well in setting up asean manpower!


  2. Hi Hitesh, thanks for the kind thoughts. I agree, definitely now prefer the buy-dip trade. Id look to buy near 16000 with s/l below 15950. Another test of 163 is certainly looking likely but there are lots of sellers, real money funds and US corps, so any gains will be fairly slow imho

  3. Good morning, Sean!
    From the beginning of week and successes to you!
    Cable I will sell from 1.6177 or about that, the purpose of sale 1.5848 to stop losses sees higher 1.6240, but I do medium-term trade therefore I will stop losses at myself slightly above 1.63 Of the area 1.5850 I will buy a cable, the area 1.65-1.66 and a stop yet didn’t define the purchase purpose. How your thoughts Sean on it? Thanks!

Leave a Reply

Your email address will not be published. Required fields are marked *