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AUD/USD drops to 5-1/2 year lows (based on nasdaq article)
The Australian dollar dropped to five-and-a-half year lows against its U.S. counterpart on Monday, as demand for the greenback continued to receive broad support.
AUD/USD hit 0.8036 during late Asian trade, the pair's lowest since July 2009; the pair subsequently consolidated at 0.8057, sliding 0.42%.
AUD/USD Fundamental Analysis January 6, 2015 Forecast (based on fxempire article)
The AUD/USD took its clues from the US dollar this morning. The US dollar rallied as traders listened to a slew of Federal Reserve speakers, who have all shifted into high gear preparing the markets for interest rate increases in the near term. The Aussie fell 34 points to trade at 0.8057 making the RBA happy as they think the Aussie should only be valued around 75 cents. The drop in the currency is also offset by falling Chinese manufacturing data which will mean lower exports. The Aussie is trading at a 5 year low.
A combination of weak commodity prices and a surging US dollar were weighing on the local currency. The key theme in the new year has been US dollar strength and falling iron ore and coal prices. The lower Australian dollar will benefit local producers.
Late last year, major banks cut their Australian dollar forecasts against the greenback to reflect this recent strength. Currency analysts at Australia’s biggest bank now expect the Aussie to fall to 78 cents by the end of March, down from a previous forecast of 86 cents.
AUD/USD Technical Analysis: Rebound Hinted Above 0.80 (based on dailyfx article)
The Australian Dollar fell to the lowest in over five years against its US namesake but positive RSI divergence warns a rebound may be ahead. A daily close above the 14.6% Fibonacci expansion at 0.8094 exposes the December 31 highat 0.8214. Alternatively, a turn below the 23.6% level at 0.8020 clears the way for a challenge of the 38.2% Fib at 0.8012.
Prices are wedged too closely between immediate support and resistance barriers to justify entering a trade on the long or short side from a risk/reward perspective. We will remain flat for now, waiting for a more attractive opportunity to present itself.
AUDUSD To Test Downtrend Resistance – Jan 6, 2015 (based on forexminute article)
AUDUSD has been trading in a steady downtrend in the past few months, with a falling trend line connecting the latest highs on the 1-hour time frame. The pair previously bounced off its lows and is showing signs of a pullback to the trend line.
Using the Fibonacci retracement tool on the latest swing high on low on the same chart shows that the 61.8% Fibonacci level lines up with the .8150 minor psychological resistance and the trend line. This could keep gains in check and push price back to its previous lows or to new ones around the .8000 major psychological support.
AUDUSD OutlookShorting at .8150 with a stop above the .8200 major psychological resistance and a target of .8000 could offer close to a 3:1 return on risk. Stochastic is almost in the overbought area, indicating that buying pressure is weakening and that sellers could start shorting the pair once more.
Event risks for this AUDUSD setup include the release of the FOMC minutes mid-week, as this might shed more light on whether or not the US central bank is ready to start tightening monetary policy this year. Hawkish remarks could add support for this bias and allow the pair’s downtrend to resume and strengthen. On the other hand, cautious comments could downplay rate hike forecasts and lead to a reversal for AUDUSD.
As for Australia, the country is set to print its building approvals and retail sales reports later in the week. Earlier today, the trade balance posted better than expected results. China will release its CPI figures on Friday and possibly show another downturn in producer price inflation.
With that, the path of least resistance for this pair is to the downside, as falling commodity prices and risk aversion are also weighing on the Australian dollar. Continued expectations of Fed tightening could keep the US dollar supported.
if actual > forecast (or actual data) = good for currency (for AUD in our case)
[AUD - Trade Balance] = Difference in value between imported and exported goods and services during the reported month. Export demand and currency demand are directly linked because foreigners must buy the domestic currency to pay for the nation's exports. Export demand also impacts production and prices at domestic manufacturers.
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Australia November Trade Deficit A$925 MillionAustralia posted a seasonally adjusted merchandise trade deficit of A$925 million in November, the Australian Bureau of Statistics said on Tuesday.
That beat forecasts for a shortfall of A$1.6 billion following the upwardly revised deficit of A$877 million in October (originally A$1.323 billion).
Exports were up 1.0 percent on month to A$27.085 billion.
Non-rural goods rose A$486 million or 3 percent, while rural goods climbed A$179 million (6 percent).
Non-monetary gold tumbled A$519 million (38percent), while net exports of goods under merchanting remained steady at A$43 million. Service credits rose A$14 million.
Imports also collected 1.0 percent on month to A$28.010 billion.
Intermediate and other merchandise goods added A$224 million (2%) and consumption goods gained A$131 million (2 percent).
Non-monetary gold plunged A$90 million (27 percent) and capital goods fell A$78 million (1 percent). Service debits added A$20 million.
AUDIO - Rocking Start to 2015 with Bill Henner (based on fxstreet article)
The first official trading week of 2015 under way, major moves were going down! Oil down 5%, DOW down over 300… could this just be the beginning?!? Market veteran Bill Henner joins Merlin for a look at these instruments and more to get a clearer understanding of where and when to get into these volatile moves. Bill also offer us insights into where he sees things going in 2015.
Price & Time: EUR/USD Collapse Continues (based on dailyfx article)
Forum on trading, automated trading systems and testing trading strategies
Something Interesting in Financial Video January 2015
newdigital, 2015.01.07 17:12
Strategy Video: Avoiding Stumbles on the Entry with EURUSD and EURJPY (adapted from dailyfx article)
The first step to any active trade is execution - and it is often the occasion for our first mistake to be made. Most traders will experience a period where they are too conservative ("gun-shy") with taking otherwise good trades and/or are too aggressive ("hasty") in jumping on dubious setups. The best solution to this common malady is approaching each setup with a plan - including a 'checklist' for execution. There are a few other aspects - the opportunity's time frame, your risk tolerance, viable alternatives - that go into the equation as well. We discuss conviction in trade execution using my views on EURUSD and EURJPY as examples in today's Strategy Video.
Intraday Outlooks For AUD/USD (based on efxnews article)
Fed officials rarely comment on the decisions taken by counterparts abroad. Yet the latest minutes included several references to the weight US officials and market participants are placing on new actions to counteract slow growth outside the US. The references amounted to a subtle warning that markets could respond negatively if the foreign policymakers, particularly the ECB, don’t follow through on expectations.
Officials “regarded the international situation as an important source of downside risks to domestic real activity and employment,” the Fed minutes said. They added that the risks were particularly serious “if foreign policy responses were insufficient.”
Consider decreasing a short position. With five waves down from the wave 4 peak, a developing falling wedge (terminating pattern) and a possible bullish divergence are all factors that speaks in favor of considering taking profit on shorts. A break above the November top line will probably trigger buying and a quick move to 0.8216. Also our fulfilled AUD/NZD target (see yday TA) helps forming a base for the AUD.
Forum on trading, automated trading systems and testing trading strategies
Something Interesting in Financial Video January 2015
newdigital, 2015.01.09 05:24
Price & Time: "Overlooked" Symmetry in AUD/USD