The Australian dollar
rallied as the early risk on rally from Sunday night rolled into early Monday
morning before many risk on gaps were closed as optimism was faded with the
return of uncertainty and concern. Greece still has to build a government and
Spanish banks aren’t out of the woods yet so worries persist and this can be
seen mainly in the U.S. dollar’s strength today. However despite this the
aussie rallied about an hour in to the lunch time doldrums, let’s see why and
what set ups are available.
The two parallel stories surrounding
the AUD/USD and one part is certainly the near-term strength in the U.S. Dollar
Index. After Friday’s sell-off (partly Greek election optimism and partly more
stimulus discounting) the dollar’s regaining some of its SHINE as concerns in
Europe grow again. Shocking.
Past performance is not indicative of
future results
The
U.S. Dollar Index is taking back all of Friday’s losses but the Dow remains
fairly strong. Stocks are maintaining gains as the dollar is being bought in another
flight to safety. This has been the main reason that the dollar has been so
resilient through the QE discounting. Notice however that the market trend
(which was up) is now 1) broken and 2) transitioning. Look for more chop and volatility
because of this.
The AUD/USD needed the Dow to press the
“risk-on-the-table” case which it has
done and in turn this comm-doll has been able to keep above the parity level.
At some point though the conversation has to shift to how tonight’s RBA Meeting
Minutes release will affect the view of the aussie. The RBA has been vigilant
about cutting rates but recently the tone has shifted to “wait and see”. While
there is some outcry for more easing, the RBA may be signaling that they are
done for now. Their stance can be strengthened by solid economic data. The move
this afternoon higher in the AUD/USD (and AUD/JPY) may be a sign that the RBA
is going to hold steady on rates.
Past performance is not indicative of
future results
After
closing the gap up open that began the week on Greek election results, the
AUD/USD moved lower to close the gap and looked as if it was ready to test
parity support once again. The 34EMA Wave held as support as did the 50 period
simple moving average on the 60-minute chart. The uptrend may appear shaky but
the dominance of the green GRaB candles showed that the bulls never lost their
grip on the market even after the move lower.
In the event that the AUD/USD pulls back sharply on tonight's data, I'll be open to a swing buy between the 1.0020 and 1.0000 area taking advanatge of the minor and major psychological levels above and at parity. This would also be a swing buy entry based upon the price action and 34EMA Wave angle on the 240-minute chart.
As an
active forex trader and Chief Currency Analyst for InterbankFX.com I do write
for a number of sites all over the web and I am happy to say that I will be
posting updates atwww.IBFXconnect.com. MyActivity Boardwill feature the trades from my trading account as well as
intraday commentary.
Start the discussion! Questions?
Comments. Leave it here at the Daily Forex Trading Edge for Raghee to
personally answer. Using the icons at the top of the article to forward this
update to a friend via email, post it on Google or Facebook or simply print it
out for reading later.
Forex trading is one of
the riskiest forms of investment available in the financial markets and
suitable for sophisticated individuals and institutions. The possibility exists
that you could sustain a substantial loss of funds and therefore you should not
invest money that you cannot afford to lose.
Posted By:
Raghee Horner
Raghee Horner, chief currency analyst for IBFX, provides her personal daily trading tips and insights through Dailyforextradingedge.com. An experienced trader with over fifteen years in the markets, Raghee is the co-founder of EZ2Trade Software and has taught her brand of technical analysis and charting strategies to students all over the world. She is an international author and has taught currencies, futures, and equities trading for over a decade.
The Australian dollar rallied as the early risk on rally from Sunday night rolled into early Monday morning before many risk on gaps were closed as optimism was faded with the return of uncertainty and concern. Greece still has to build a government and Spanish banks aren’t out of the woods yet so worries persist and this can be seen mainly in the U.S. dollar’s strength today. However despite this the aussie rallied about an hour in to the lunch time doldrums, let’s see why and what set ups are available.
The two parallel stories surrounding the AUD/USD and one part is certainly the near-term strength in the U.S. Dollar Index. After Friday’s sell-off (partly Greek election optimism and partly more stimulus discounting) the dollar’s regaining some of its SHINE as concerns in Europe grow again. Shocking.
Past performance is not indicative of future results
The U.S. Dollar Index is taking back all of Friday’s losses but the Dow remains fairly strong. Stocks are maintaining gains as the dollar is being bought in another flight to safety. This has been the main reason that the dollar has been so resilient through the QE discounting. Notice however that the market trend (which was up) is now 1) broken and 2) transitioning. Look for more chop and volatility because of this.
The AUD/USD needed the Dow to press the “risk-on-the-table” case which it has done and in turn this comm-doll has been able to keep above the parity level. At some point though the conversation has to shift to how tonight’s RBA Meeting Minutes release will affect the view of the aussie. The RBA has been vigilant about cutting rates but recently the tone has shifted to “wait and see”. While there is some outcry for more easing, the RBA may be signaling that they are done for now. Their stance can be strengthened by solid economic data. The move this afternoon higher in the AUD/USD (and AUD/JPY) may be a sign that the RBA is going to hold steady on rates.
Past performance is not indicative of future results
After closing the gap up open that began the week on Greek election results, the AUD/USD moved lower to close the gap and looked as if it was ready to test parity support once again. The 34EMA Wave held as support as did the 50 period simple moving average on the 60-minute chart. The uptrend may appear shaky but the dominance of the green GRaB candles showed that the bulls never lost their grip on the market even after the move lower.
In the event that the AUD/USD pulls back sharply on tonight's data, I'll be open to a swing buy between the 1.0020 and 1.0000 area taking advanatge of the minor and major psychological levels above and at parity. This would also be a swing buy entry based upon the price action and 34EMA Wave angle on the 240-minute chart.
As an active forex trader and Chief Currency Analyst for InterbankFX.com I do write for a number of sites all over the web and I am happy to say that I will be posting updates at www.IBFXconnect.com. My Activity Board will feature the trades from my trading account as well as intraday commentary.
Start the discussion! Questions? Comments. Leave it here at the Daily Forex Trading Edge for Raghee to personally answer. Using the icons at the top of the article to forward this update to a friend via email, post it on Google or Facebook or simply print it out for reading later.
Forex trading is one of the riskiest forms of investment available in the financial markets and suitable for sophisticated individuals and institutions. The possibility exists that you could sustain a substantial loss of funds and therefore you should not invest money that you cannot afford to lose.
Raghee Horner