AudUSd

[MightyMouse 12]

So I'm sim-trading the AUD.USD and still trying to figure out patterns of this currency pair. My question is, if Australia cuts interest rates by 50-75 basis points, we should expect to see a rise in the AUD.USD pair, correct? Or do I have this backwards? Any help on this silly question would be appreciated.

 

Still learning,

 

CYP

 

It really depends... but the general case is that the AUD will be less attractive relative to the USD if AU cuts rates

 

the most important rate is the real rate of interest and not the nominal rate. The real rate in its simplest form is the nominal interest rate minus the local inflation rate.

 

So the AUD could actually go up with a cut in interest rates if there were also a drop in inflation expectations in AU. The AUD/USD could also rise in value with a cut in rates in AU if there were a larger cut in US rates or if there were an increase in the expected rate of inflation in the US.

 

You can then take the above basics and expand into the impact of other economic data on the rate of interest and inflation of each of the countries to determine the relative attractiveness of one to the other.

[Mysticforex 13]

or if there were an increase in the expected rate of inflation in the US.

 

 

Wouldn't that lead specs to wonder if there might be a sooner than expected rate hike in US?

= stronger USD.

[elli 10]

AUD/USD threatens 1.0400

 

The RBA has left the cash rate intact at 4.25%, matching expectations. However, Governor G.Stevens has stressed that “the pace of output growth to be somewhat lower than earlier estimated”, signaling at the same time that further easing could be more likely if the upcoming data on prices disappoint.In the same tone, retail sales for the month of February rose 0.2% MoM, below the estimates and the previous print, both at +0.3%.At the moment the cross is losing 0.17% at 1.0404, with the next support at 1.0323 (Lower Bollinger) ahead of 1.0305 (low Mar.29) then 1.0299 (38.2% of Oct-Feb rise) and 1.0232 (low Jan.13).

On the upside, a breakout of 1.0470 (hourly high Apr.2) would expose 1.0491 (MA21d) then 1.0558 (high Mar.27) and 1.0605 (MA55d).

[MightyMouse 12]

Wouldn't that lead specs to wonder if there might be a sooner than expected rate hike in US?

= stronger USD.

 

Some of the economic reasons in the current interest rate environment would be anticipation of gdp improvement, lower unemployment, an uptick in the housing market such as housing starts, new home sales, etc.

 

The US has near 0% rates so almost any sign of wage inflation heating up would be welcome and would lead to fed tightening or to at least the speculation of tightening or to an end of the era of incredibly easy money policy.

 

Inflation created by economic strength in the US will generally lead to higher rates and a stronger USD. Inflation created by rising commodity prices and printing money leads to a weaker USD.

 

Ending the tension with Iran would certainly strengthen the dollar since oil would likely drop into the 60's

[Obsidian 10]

...Ending the tension with Iran would certainly strengthen the dollar since oil would likely drop into the 60's

 

Guess there are too many oil speculators in the US congress :rofl:

 

Meanwhile if we spend the day below 1.0370, 1.03 is coming soon...

[Mysticforex 13]

In the A$ the spec long increased to 67.4K contracts, up from 54.3K, but the Open Interest went down, not a sign of strong buying interest.

[Obsidian 10]

Guess there are too many oil speculators in the US congress :rofl:

 

Meanwhile if we spend the day below 1.0370, 1.03 is coming soon...

 

1.03 printed, lets see what is next...

gold is diving, eur/usd fell 120+pips...but cad and aud are behaving weird again...

[Obsidian 10]

Aud is still weak.........

[NeoTrader 10]

IMHO I think we will find some support here around 1.030 to begin the move up

[Mysticforex 13]

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Here's where I eventually see AUD.

[Mysticforex 13]

We have broken the TL on the upper channel I posted yesterday Weather the Aussie can hold the advance may depend on data coming from China tonight. Among the important Chinese numbers we get is the GDP q/y, expected to be a positive 8.4%, as well as some minor reports. Should the numbers fail to confirm China is headed toward a soft landing, the A$ may be vulnerable to a sell off, coming after today's gains.

[Obsidian 10]

looks like market did not care much about weaker Chinese GDP data.

today tested broken tl...a weekly close above 1.04 may give some fuel to bulls..we will see

[kuokam 10]

Long term uptrend intact but very weak momentum

[Obsidian 10]

AUD had stopped right above t/l, lets see what will happen today

[Mysticforex 13]

Just curious, on a short AUD/USD, what kind of negative roll are folks paying?

I am paying 1.6 .

[Mysticforex 13]

This has been a perfect week for range trading the A/U. I know we all have expectations of a break one way or the other, but I for one would be delighted with another week like we had this week.

[Obsidian 10]

my 4h charts say that it is possible we will see to 1.0418 as long as we are above 1.0343.

[Obsidian 10]

waiting for a breakout.......

[Mysticforex 13]

waiting for a breakout.......

 

Wouldn't 10418 break the TL on your chart?

Mine as well.

[Obsidian 10]

aud broke below 1.0300...going to test 1.0250 probably?

if Bernanke says no further easing, 0.9900 tomorrow:roll eyes:

[Mysticforex 13]

aud broke below 1.0300...going to test 1.0250 probably?

if Bernanke says no further easing, 0.9900 tomorrow:roll eyes:

 

Yes, this is a big week for USD news, 4/24 New Homes Sales.

 

4/25

Core Durable Goods Orders m/m

 

8:30am USD Durable Goods Orders m/m

 

10:30am USD Crude Oil Inventories

 

12:30pm USD FOMC Statement

 

12:30pm USD Federal Funds Rate

2:00pm USD FOMC Economic Projections

 

 

 

2:15pm USD FOMC Press Conference

 

 

4/26 Pending Home Sales.

 

Also earnings reports scattered thru out the week.

[Mysticforex 13]

COT:

 

Specs added about 13K contracts of net longs to the A$. Much of the increase in the net long was effected by reducing their short positions. Market action since the end of the report have not helped the longs.

[Obsidian 10]

12:30pm USD FOMC Statement

12:30pm USD Federal Funds Rate

2:00pm USD FOMC Economic Projections

2:15pm USD FOMC Press Conference

 

exactly 24 hours left to the event...if there is no more qe, xxx/usd pairs may enjoy free fall...

[Obsidian 10]

1h15m till fomc...pretty boring...lets see what Bernanke will say first.

[turboonostrilvision 10]

This pair remains under ma200 and I think it still provides more for bears just now.