Ok…..you’re all going to say “Common that’s crazy!” “This Kong guy is crazy!” “It just can’t be!” “That’s nuts!”
Ok..ok……fair enough, but I’ve got to get this off my chest.
The Australian Dollar has been beat down hard over the past few months yes….and I have been reluctant to “jump on board” with any real passion as I’ve come to learn – you really can’t chase things once they’ve fallen too far.
I’ve had some great “small time/ intra day” type trades involving AUD but that was more or less based on simple principals of “risk being sold” in general – and not so much “specifically” about AUD itself.
Well wouldn’t you know it…and it is still a bit of a hunch but…….as markets would have it (looking to confuse the largest number of people, for the largest amount of time) juuuuuuust as “global risk / China fears” headlines start blasting to the masses.
AUD is set to bounce.
This will be the first time in my entire career as my mid to long term analysis has clearly suggested “risk off” – that I will actually consider trading a move upward in AUD.
Unreal.
Please keep in mind – a move higher here in AUD will be considered a counter move to the well established downtrend in place. I imagine the correlation of U.S dollar and U.S equities will now “reverse” as USD falls – I imagine equity players will get their bounce.
Watch out for Kangaroos – bounce, bounce, bounce.
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Commenting on my own post again…..u gotta love it as I can’t type fast enough.
This is a significant turn/ implication as risk will likely “bounce” here, and the prior correlation of USD down = US Equities down — will now invert –.
This next leg down in USD should provide the “bounce” in U.S equities.
AUD/JPY or AUD/USD ? Thansk Kong!
Kong, how significant do you think the bounce will be? I see the 6A futures at the bottom of a channel going back to 2010 and right above a 61.8 retracement from the ’10 lows to the ’11 highs. Going back to the top of the channel would take it to near recent highs, but that seems far-fetched.
When AUD ( and risk ) bounces…it bounces hard so……in my eyes…larger move against USD as it’s heading lower….while JPY should (crazy I know) exhibit some relative strength.
I’m gonna watch both like a hawk, but would be inclined to trade against USD here as opposed JPY….or……both with smaller positions vs JPY.
Im looking at AUD/USD as a working example and would give my left N”%T for a pop to 97 – 98.00 area to get short for the rest of 2013 and well into 2014.
AUD/JPY hmmmm…….95 -96 ish?
Anywhere close ( in my view ) will be the single most valuable entries “short risk” in coming weeks.
I wonder what CNBC has to say about it? he he he…..
“Short risk” means risk off ?? Thanks.
Yes “short risk” would be to “sell risk” and position yourself short / bearish – U bet.
Thanks Kong !
Where does one go about learning to trade forex? Did you read any books to learn about it, or just through experience?
Glad to have you aboard Kong. As I posted a couple days back my assumption was that the AUD was ready to bounce I had an audusd position before the fed and got nervous and sidelined. Held my audjpy. It is is in the money. Might add audusd but I already have a fair bit of risk exposure as a result of positions today.
Good luck to all. Bank Coin
There is some sense to the AUD bottoming (short term) before other risk assets due to sensitivity to base materials. Does anyone agree or no?
Hey rookie….good for you getting started.
I can’t really suggest much as I started from absolute scratch but can suggest some simple searches at google for “how to learn forex” etc…..
There are about a billion websites out there showing you the basic principals, and literally “years worth of learning” available 100% free on the net.
You’ll need to get all of that under your belt before considering risking your own hard earned money.
I can also recommend to get started with a free forex trading platform such as Metatrader 4. You can watch the market…place “fake trades” and see your results…with no risk.
Hope it helps…and good luck!
Jskogs!
I’d say its more a situation where AUD “topped” as the slowing in China is only “now” entering western main stream media.
This is not a bottom ( not by any means) but only the first “zig” in the now “newly formed trend” of “zags” which is now headed lower.
Globally – lower…..any and all AUD bounces ( no matter how high ) will be aggressively sold by …..KONG!!!!!
Ya sorry I should probably state my time horizon. I take 3 day to 2 week trades often so sometimes that is my bottom. I trade futures mainly so with the inherent leverage I find short term trading can be fairly profitable. Long term the AUD has plenty of room for slackening.
You are bang on the money Jskogs!
You got it….time frame wise…..we are both trading the same.
I’m up for a good solid bounce in an established downtrend.
“if” – we get it!.
And thanks for the input. It is appreciated.
Really really great post. And appreciate your in-depth response to all these smart comments.
Thanks again for your continued actionable insights.
Thanks Jworthy.
Take it for what it is….this “is” what I do.
Might as well chat about it!
AUD/USD is hitting 61.8% off of 2009/2011 move, that is why Gartman was probably so hot for it, and why it hit some support for a reversal. But we have RBA on the 2nd and Stevens could cut, inflation was his focus in the last minutes. Aussie Bonds are a bit firmer tonight after their free fall..but there is only T/A hope to hold this support, no fundie reason at all.
Nymph. Of course there is the chance of a rate cut but that is and has been well known for months hence the downtrend. Doesn’t mean there won’t be trade-able rallies. We don’t really know how much expected rate-cutting is priced in.
Exactly – at this junction absolutely “0” fundamentals….maybe not even a decent trade ( as for me it’s counter trend ) , but certainly something to keep an eye on.
jskogs..Rate cut is still an unknown but with the Aussie Bond Yields pushing up odds increase. The downtrend is the China Story, not Stevens so much imho. Tonight we see aud/usd at .9222 , it’s following the Shanghai Comp down in lock step. Kong, Yes your call on eur/usd , USD/JPY and that Aud, NZD oversold bounces were correct, but jumping in front of Bulldozers for a few coins is a hard trade at best. But that is you. 🙂
Ya loss of demand and rate cuts would generally go hand in hand. My es and zn positions are doing well but was surprised to see audjpy has not broken out of its congestion. Will be keeping a watchful eye as it might have false potential. Enjoy the day guys and gals
Ya – I’m not trading it ” as of yet ” – and may not trade it at all….but was concerned that a move up in AUD would likely take a number of people by surprise.
Juuuuust like markets love to do!
As it stands….I’m still keeping an eye on it – but have no active AUD trades.
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