You’ve really got to shake your head when the “poster child currency for risk” continues to move higher in the face of looming credit crisis in China, possible war in Eastern Europe and a “soon to be announced” USD debacle in the states.
Or do you?
Doesn’t it make the most sense to “those of us in the know” that things generally go “higher” before going “lower”?
I mean really…….markets don’t “crash” from the lows! Markets fall from the “highs”!
Currencies really being no different.
I imagine in a couple of days ( or perhaps even within a couple of hours ) you can look back on this and say “Ya ya Kong was early as usual…damn! That Australian Dollar really put up a good fight there near the end”.
And that will be that.
At Zero Hedge:
UPDATE: It’s happened – China has suffered its first domestic corporate bond default as Chaori fails to meet interest payments on schedule and rather more surprisingly failed to receive a last-minute mysterious or otherwise bailout…(read more)
Kong,
You’ve got to be objective here and watch the price action, from the 87 lows. This does not have the semblance of a fake move to me. Whilst i agree with you with regards to your fundamental considerations, there is no way of knowing when (and if) they will impact the currency.
Short term i’m expecting a pullback & risk/reward does favour a possible short here (i have initiated a small position at 91.15) but if we hold the 90.50/89.80 zone for a few days, we have to assume that we’ll be tagging the 94 area.
However, looking at the indexes, especially the european ones this morning, seem to me ready to roll over (I’m short FTSE, CAC & IWM) If the US were to follow, then your AUD thesis will likely prove to be right!!
Kong, i dare not to add any positions for aud/jpy, as well as nzd/usd- don’t want to add any burden. The US has run into some turbulence but market sentiment remains positive over the US economy and the Fed is likely to trim QE again in March. So i quite confidence that usd and jpy will get strengthen very very soon. Perhaps start from next monday 😉
Good plan Carey….stay safe.
No need to rush into anything here.
When something goes up like rocket i’ts better to close shorts and stay out (at least for me). AUDUSD above 0.91 and I don’t see why it should start going down, maybe today’s NFP > 200k?
I’s been only good data for AUD and bad data for USD recently. If I re-enter AUD shorts, it should be probably against GBP, because USD does not look good at all.
Still keeping AUDJPY though, good resistance here.
watching for GBP/AUD long here as well, but AUD “just not quite” running.
It’s interesting as….in the past we’ve seen USD fall “as well AUD fall more” so……depending on risk appetite here ( and considering how nutty / wonky markets are these days ) it’s not beyond consideration that they “both” fall.
NZD petering out too so……could be an interesting move here, and could catch ALOT of traders offside.