Took a trade this morning off the back of ausie retail sales last night. The market responded favorably to the data however i was asleep at the time. First thing in the morning during catchup of the previous session the trade opportunity was clear through sentiment following the release. Following on from Friday where the dollar was soft after NFP data, i did expect that theme to continue today and probably more medium term but will discuss that later. Entry @0.76243 and just taken profit @0.76541 for about 30 pips.
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Unless housing or dept deteriorate further and at an accelerated pace, i don't think they will play a large part in any opportunities to sell. What is going for the economy is improving economic conditions albeit with low wage growth which is due to slack in employment. They recently printed a trade surplus that is better than the previous 10 months which ties into their major trading partners strengthening economies.
Note the US $ is on the verge of cyclical softness statistically (https://www.forexlive.com/technical-analysis/!/june-forex-seasonals-avoid-the-us-dollar-20180602 )
The US $ is also largely priced in according to policy and high profile names in the industry have said they are US $ sellers now. There also isn't any new information that will add fuel to its recent bullish trend. When the US $ is soft ,emerging currencies normally appreciate so long as the major trading partners are okay.
In short, i will only be selling the AU$ over the month on sentiment but will look at any buy opportunity as a higher quality trade.
https://www.rba.gov.au/publications/smp/2018/may/domestic-economic-conditions.html
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Thanks for posting on AUD. I am keeping a close eye on debt and housing. Credit availability is Likely to tighten with the Royal Commission into banking et al ongoing. RBA not likely to raise rates for the foreseeable. Everyone in Aus borrows to the eyeballs inc shiny new cars etc and if you talk to people about housing they think it can only go up! The last recession is a distant memory from the 90's. There is a lot of talk of reducing immigration for political reasons as successive Govts have not spent on infra. Not a good mix imho.
The wold one day is going to blow up from debt. Here is a bloomberg headline that will take your breath away.
Global Debt Jumped to Record $237 Trillion Last Year
They state it is 70 trillion higher then a decade before thanks to super cheap money. We should be paying down debt not accumulating more of it. At some point the party is going to be over and it is going to be chaos. global debt is approx 317% of global Gdp and as far as I can tell most nations are continuing to accumulate more.
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Global Debt Jumped to Record $237 Trillion Last Year
They state it is 70 trillion higher then a decade before thanks to super cheap money. We should be paying down debt not accumulating more of it. At some point the party is going to be over and it is going to be chaos. global debt is approx 317% of global Gdp and as far as I can tell most nations are continuing to accumulate more.
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Just had a thought. When AU finally raise rstes, that's when the test of debt capacity will yield either a strong economy or another crisis. I wonder which UK banks have toes, limbs, the kitchen sink, and probably more in that pie. Their housing market boomed like ours did.
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Update for the day - South Africa GDP data released today with an expected -0.5 and an actual of -2.2 QQ annualized and YY expected 1.8 and actual 0.8. I immediately shorted EURZAR and within an hour closed for 100 pips profit. This sort of deviation is a no brainer. You just need to work out beforehand what counter currency to pair with. In this case both USD and EURO were okay.
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wanted to point out UK services PMI beat on expectations today (expected 52.9 with actual 54). I didn't trade this because I was focused on my other trade but it would have been worth 40 pips. 79% of GDP in the UK comes from services and there has been chatter among BOE central bankers about hikes. This data notches them further in that direction.
Note to self: look at all opportunities for the day and don't just focus on one!
Note to self: look at all opportunities for the day and don't just focus on one!
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Good Morning
Only 1 opportunity today by the looks of it (unless none-economical news changes sentiment) off the back of early morning AU GDP beat. GDP is a leading indicator and when there is a beat or miss the market will definitely react as it did with AUSIE this morning. I don't care to be up all hours waiting for this stuff because you never know when there will be a deviation. Anyway, there is a very good chance the EMEA session will buy into this as it reflects the economy being stronger than what has been priced in and they will want their share of that pie - as do I. So bought on a pullback of that little breakout on the 5 min chart against USD.
My reasoning for pairing with USD is the due to it being on the soft side even though good data has been released. The markets seem to have priced in the current US data and now don't seem to show much interest in pushing it higher. Coupled with seasonal statictics of a softer $ in June and ongoing trade disputes i believe the USD will be subdued until fresh data takes it either way. There appears to be a fight going on with technical traders looking to short the level (look at hourly chart double top setup). I am placing a 10 pip stop below 0.76498 short term swing low formed after the news spike @ 0.76398
May the best man win
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My preference is generally to react to news but i have had good success of trading after the fact when news is out in the APAC session and the data was positive.
Only 1 opportunity today by the looks of it (unless none-economical news changes sentiment) off the back of early morning AU GDP beat. GDP is a leading indicator and when there is a beat or miss the market will definitely react as it did with AUSIE this morning. I don't care to be up all hours waiting for this stuff because you never know when there will be a deviation. Anyway, there is a very good chance the EMEA session will buy into this as it reflects the economy being stronger than what has been priced in and they will want their share of that pie - as do I. So bought on a pullback of that little breakout on the 5 min chart against USD.
My reasoning for pairing with USD is the due to it being on the soft side even though good data has been released. The markets seem to have priced in the current US data and now don't seem to show much interest in pushing it higher. Coupled with seasonal statictics of a softer $ in June and ongoing trade disputes i believe the USD will be subdued until fresh data takes it either way. There appears to be a fight going on with technical traders looking to short the level (look at hourly chart double top setup). I am placing a 10 pip stop below 0.76498 short term swing low formed after the news spike @ 0.76398
May the best man win
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My preference is generally to react to news but i have had good success of trading after the fact when news is out in the APAC session and the data was positive.
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I've shorted the Aussie from 0.7660. The AU GDP data is distorted and lagging imho...current events with banking royal commission and Govt trying to prop up economy with defence spending etc is a warning sign. I don't see much upside beyond 0.7700 and think that an domestic ( companies/jobs/political) export vs commodities exports priced in USD will ultimately push The Aussie to around 0.75 zone.
Hey Swissy
I think you are not factoring in a major element to the AU economy and that is the correlated global recovery and growth wave that is feeding demand for AU commodities. This GDP number shows the economy expanded faster than forecast driven largely by the global demand for commodities. I don't think this surprise growth is sustainable and in the long term we very well could see weakening. That being said the BOE have kept rates steady signifying no immediate concern requiring policy to be loosened.
regarding the military spending
Australia is one of the top non-NATO troop contributors to NATO-led operations in Afghanistan. I recall a while back (early in the year) that Nato members are all increasing their defense spending. With AU making headway in the global stage it makes sense for them to also move in tandem else they wont be taken seriously.
Good Morning
Only 1 opportunity today by the looks of it (unless none-economical news changes sentiment) off the back of early morning AU GDP beat. GDP is a leading indicator and when there is a beat or miss the market will definitely react as it did with AUSIE this morning. I don't care to be up all hours waiting for this stuff because you never know when there will be a deviation. Anyway, there is a very good chance the EMEA session will buy into this as it reflects the economy being stronger than what has been priced in and they will want their share of that pie - as do I. So bought on a pullback of that little breakout on the 5 min chart against USD.
My reasoning for pairing with USD is the due to it being on the soft side even though good data has been released. The markets seem to have priced in the current US data and now don't seem to show much interest in pushing it higher. Coupled with seasonal statictics of a softer $ in June and ongoing trade disputes i believe the USD will be subdued until fresh data takes it either way. There appears to be a fight going on with technical traders looking to short the level (look at hourly chart double top setup). I am placing a 10 pip stop below 0.76498 short term swing low formed after the news spike @ 0.76398
May the best man win
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My preference is generally to react to news but i have had good success of trading after the fact when news is out in the APAC session and the data was positive.
The trade was within an hair of being stopped out earlier. My stop was at 0.763980 and price reached 0.763986. Price is not behaving like i would expect and have decided to move my stop to break even and see what happens. I would normally just close it but there's small room to give it a chance.
this is what it's up against (taken from forexlive)
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Thanks for commenting FXX. At face value you may be correct but Aus has a very distorted economy and there is a real chance that this may de-couple from the overall global recovery for the reasons covered earlier.
As for military spending, again distorted, main spending is on new platforms for Navy and Airforce to create a local defence industry and jobs ( to replace car industry which has folded). If you look at previous projects and cost blowouts this has not ended well for the taxpayers! If or when the economic conditions go pear shaped they will become unaffordable.
Let's see....
Looks like you make some dosh on your trade. I was stopped out last night.
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I have closed half off at 0.7620.... still think it could go to 0.757 but will see...