A quick update for those who’ve been following and have come to understand the “extremely large” position I’ve been building “short” The Australian Dollar.
They say that “good things come to those who wait” and believe me……I’ve been waiting.
If you can imagine, The Australian Dollar has traded sideways / flat for an incredible 24 weeks, until just yesterday smashing lower -250 pips in a matter of hours.
AUD_Sept_10_Forex_Kong
We all know that “in general” The Australian Dollar trades along side risk, moving higher with stocks so it is worth noting that with yesterdays “tiny fall” in U.S Equities we certainly got a reaction out of AUD.
If / when a larger correction unfolds one can only imagine profits generated “staying short” AUD as I plan to.
On a side note – I don’t believe for a second that Scotland will vote “yes” to separate from The U.K, and that long GBP here is looking very, very good.
Long GBP/AUD anyone? Kinda makes sense if you actually take a minute and think about it.
GBP going up….AND AUD going down. These are the trades that pay.
Kind of hard to get in Long GBP/AUD right now Kong as it just shot up from 1.72 (Sunday) to now 1.77 (that’s 500 pips in a couple of days). Perhaps on a pullback if the AUD data comes out strong. But, I still wouldn’t be surprised if GBP/USD tested 1.60 or even 1.58 just before the vote next week. At which point, Longs can look very attractive (but still a risk holding over Scotland vote).
GBP/AUD back down to 1.7580 after that data, much better price now. What’s your ultimate target on AUD btw Kong? I’m not really seeing it under 0.88; people just love the AUD. AUD/USD testing 0.922, so shorting could look good here.
How bout considering GBP /AUD at new all time highs past 1.92 to start, and AUD/USD to new lows “below 86”.
121,000 jobs added with estimates of 15,000…. that’s insane btw!!!
What you’ll notice it that this news makes absolutely no difference with respect to the future movement in AUD.
No “country specific data” makes an impact / difference with respect to where where “global apetite for risk” sits.
Agreed, but it was enough to bring it back to that important 0.9220 zone for newcomers to join the party. A weekly close below 0.9180 is important I believe for near-term weakness.
I don’t doubt GBP/AUD can blow passed 1.92, and am even targeting low 2.0’s longer term, but it’s a pain to time; I didn’t think we’d get this far down passed 1.80 and can now even see us getting to 1.68 before 1.92. With that said, I have no doubt we can hit 1.90’s again, but it may not be until next year. 1.62 I see as the ultimate low though and I would just load the boat from there longer-term.
So it goes……lots of little price levels in there ( a little “noisy” for me ) considering the amount of time this thing has traded sideways.
As it stands…..I don’t really plan to touch my AUD trades once this kicks off and finally starts moving.
I imagine thme to be some of the largest / most profitable trades of the coming year.
Do you think AUD the weakest currency out there? I personally thing Euro best to short against so i’d go GBP/EUR. What are your thoughts?
I don’t pairs so closely correlated as EUR/GBP and certainly not in this scenario as both have been so beaten down.
There is no “edge” when trading pairs like this, as opposed to a pair that pits a “safe haven” against a “commod” such as AUD, NZD, CAD.
If AUD us getting hit then “global appetite for risk” is getting hit so…..
My shorts AUD are now turning to gold.