Kores I am not against going long. I will wait till technicals are pointing that way. I honestly do not expect a rate cut (but this is my opinion) I see one after the new year. I see AU going up here soon. Market flow is up if the USD save us from going off the fiscal cliff the AU will go up. So I see longs coming soon. Like I said in one of my resent post I might put my entire accont on green (but even though I have the want I dont have the ability as I just cant do it. its not in me its not what I do).
Reason for this is the USA will come to an agreement to avoid the fiscal cliff. This will create a risk on environment causing foreign currencies to rise over the dollar. Thus AU will go up. This is not good for the aussie dollar.
So what would make more sense to cut rates now to lower there dollar vs the USD just to watch there attempts go in vain after we save the USA from going over the cliff. This would wipe out all they tried to do.
Or would it be wider to let the USA save them selves from the cliff (if this is even possible) let the AU go up while big bank position short during this rally. Then (the same big banks that sold into the rally of save the USA) cut rates by more than expected causing the AU to jump out of an airplane with no parachute. Now they killed 2 birds with one stone. They lowered there overvalued dollar and made a killing in doing so.
Retail Sales Flat… Probability of rate cut tomorrow is higher at 89%.
I[RBA PRICING] Markets have turned even more convinced of a rate cut following this mornings disappointingly weak Oct retail sales…
[RBA PRICING] Markets have turned even more convinced of a rate cut following this mornings disappointingly weak Oct retail sales report, an 8th straight month on decline in job ads over Nov, a larger than expected fall in company profits over Q3 especially in the mining sector and a contraction in the manufacturing sector for the 9th month in a row in Nov. Inflation also came in contained over Nov, whilst Q3’s biz indicators showed wages easing 0.2% q/q. OIS’s are now pricing in a 25bps move at tomorrow’s meeting as a virtual done deal or 89% risk versus around 60% mid of last week. There is still the odd chance RBA will hold until Q$ is released in Jan, but the bigger question now appears to lie as to whether rates will be cut by an even larger 50bps. [/I]
The Reserve Bank of Australia (RBA) decided at today’s December meeting to reduce the key policy cash interest rate by 0.25 % to 3.0 %
The RBA Governor Glenn Stevens’ brief statement highlighted that “Global growth is forecast to be a little below average for a time” .There are downside risks to this global outlook given “the situation in Europe” and “uncertainty over the course of US fiscal policy”. Notably Asia has been" dampened by the more moderate Chinese expansion and the weakness in Europe".
Australia’s economic growth has been “running close to trend over the past year, led by very large increases in capital spending in the resources sector” . Yet the RBA recognises that the “recent data confirm the peak in resource investment is approaching”.
Notably the RBA is cautious about the strength and timing of a recovery in the “Non Mining” sectors. Consumer spending is “expected to grow, but a return to the very strong growth of some years ago is unlikely”. Commercial construction " remains relatively subdued". Federal & State Government “spending is forecast to be constrained”. The RBA’s hope is that there are “indications of a prospective improvement in dwelling investment, with dwelling prices moving a little higher, rental yields increasing and building approvals having turned up”.
The RBA Governor states that “over the past year, monetary policy has become more accommodative”. There are “signs” that these “accommodative” and “easier conditions” are “starting to have some of the expected effects” . However the RBA is concerned that the “exchange rate remains higher than might have been expected” . So the high A$ is a key factor in this December interest rate cut.
Given that the RBA has significantly lowered the cash rate from 4.75% in October 2011 to currently 3.0%, the central bank should be ‘catching its breath’ on monetary policy. Interested in what you think?
maybe they playing with the idea, that Aussie has to try itself out in a long, that will fail now, because it hasn’t as much steam in it as before. it’s like giving a job for a non-competent. cruel. but always works.
Lol guess it was a good thing I didnt trade it or was it. I said last week I would put it all on green. Hech I could have made 1000% of my account last night lol. On a side note though I would have actually gone short as techs were signaling movement to the downside. They just would as clear as I like them to be.
In any case strange to see the Aussie lower rates and yet the pair goes up. Sometimes it pays to sit out.
Would like to take a moment to show a potential trade setup I am stalking. After the rate cut the Aussie was able to gain on the dollar. It moved dead smack into an resistance level with and OTE on the daily
Want I am looking for is for price to either rise up into the upper portion of the range (basic concept of traders trinity on this range) or break it and then retest it with some type of candle formation or something. Were are heading into Asia so things might get interesting.
Its due to the moron Glenn Stevens, head of the reserve bank inferring that there will be no more cuts or perhaps the next move will be up, thus leaving the AUD to be a higher yielding currency, the RBA acheived the opposite of what it wanted to do. stupid stupid stupid.
Little to late as I got my entry here is a 15 minute chart. Price indeed pulled up into my entry zone formed a pin bar and I got in close to the 50% retrace of the pin bar. I did not risk much as I dont like the candle I entered on. However its not closed and means nothing to be (as of now)
I think its a bit more complicated than that mate, and I didn’t read anywhere that he “inferred” there will be no more cuts and especially not a move upwards. The carry trade is not the only reason driving demand for the Aussie and the high Aussie dollar is certainly not the RBA’s primarily (only) focus. The move up yesterday was more likely because the market had already factored in the 25bp rate cut and since there were no real surprises in his speech (global concerns & inflation is to remain consistent) the market is now free to continue the uptrend.
Technical analysis assumes all current market information is reflected in price. Thus, if a rate cut is expected and price has already reacted on this assumption, why should the Aussie decline further when we are at the bottom of an uptrend…
At the end of the day, the market controls the exchange rate, the BOJ will attest to that!
my instinct sais, that today it slips to the level between my two horizontal line, maybe about 1.044, there’s an important EMA too, than crawls up. it depends how fast and can it break the daily trendline or just touch it, and depends, where will be the G/U at that time. because if it will be at about 1.0617 where I will short GU, maybe the Queen can help too to trade down the Aussie as well. I await it to Thursday. it’s a pity that I’ll have some work to do, not just FX. but, pending orders can do what they can. order at 1.052 . if not filled, there will be Friday to join. Developments overseas put some wind in sterling’s sails
how amazing, it’s really like a living thing, as tapping to the 1.045 rope with his legs after it released from the daily trendline. I’ve never seen it like before.
My previous trade was stopped out this morning. Sucks to as it hit my intended target twice but I was not there to close the trade. Brings back the age old question of setting a TP when not home (which is most of the time lately). Oh very small loss so nothing to fret over. NFP today happy trading
Sorry about the loss, although glad that it was a small one. To pick up that SL point, personally I always set a TP order. It is generally at a moderately ambitious level, in order that I can still capture a good run should things really move with me. Generally I then trail my Stop up manually towards that level, and exit the trade when either the trailed Stop or the TP order is hit. I don’t think I have ever placed a trade without setting orders for SL and TP at the same moment. Guess I’m the cautious sort!
I should as well I know that especially since I am not a day trader. Some of my most profitable trades have come from not setting a TP. So I guess it all boils down to statistics and what is more profitable over the long haul. As I always trail as stop as you do. Anyhow thanks for the kind words as always
