Get started

Australia

What does it all mean?Remember that AUDJPY SPX correlation that was so strong last year? It's completely broken down. When the AUDJPY fell in sync with the stock market that usually signified that there was a market move from risky to safe haven assets. Lately, even though the AUDJPY has fallen and stayed flat, the stock market has rebounded strongly and threatens to rise higher. What does this all mean? 1. SPX is more resilient meaning that it offers the best return. With earnings falling it is creating a bubble where the fundamentals and risks don't match the price. The AUDJPY represents the true level of fear in the market. 2. The AUD and Aussie bonds is less attractive with the RBA dropping rates, political and economic uncertainty. Commodity prices are still low. 3. The stock market isn't as bad as the negative sentiment going around. Market is correctly priced. 4. Short squeezing. Meaning that short sellers are closing their trades or hedging. 5. Bargain hunters. Traders believe that the drops represent profitable opportunities. It's probably a combination of all these factors, but what I really believe mostly is happening is that foreign buyers, such as those in Asia, specifically China and Japan (who have no faith in their own markets), and European investors where euro stocks are much riskier, are pumping their money into the American stocks. This is creating, certainly imbalances that can only be solved wen Americans start participating in their own markets. When Americans start investing more strongly in their own markets, the Fed will likely raise rates. When they raise rates, there will certainly be a period of volatility but this will just be an era of rebalancing. In any case, I believe that the market must go down before it goes back up.
FX:SPX500Short
by maccabean
Will the Australian central bank cut rates?Bolstered by a rally in commodities, improved manufacturing data and employment levels in Australia, the economy is doing very well. In fact, it has been the best performing economy among developed nations outside Europe. However, the appreciating AUD is undermining this strong economic performance, dragging the country down and hampering growth. It is in the Australian central bank's best interest to cut interest rates to allow the AUD to depreciate and the economy to grow with the strength it should be. As well as this, the inflation levels in Australia are still below the 2-3% target at 1.7%, giving room for a rate cut. I think that further appreciation of the AUD will cause central bankers to realise its unsustainability - for want of a better word - in undermining economic growth, and will go forward with a rate cut. Thus, if the AUD reaches the region indicated by a box on my diagram, I will consider shorting AUD, with a target price somewhere in the low 70 cents region.
Short
by olly_price
$AUDCHF | High Probability Reversal @ 0.78228 | Fib Wolfe GeoHello Traders, Here I have utilized the the Wolfe Wave, Geo's Off-Set Rule, and Fib clusters. Wolfe Wave - Within the Wolfe's 1-2 and 2-3 points you must look out for an ab=cd pattern which we clearly have stated here. Points 3-4 and 4-5 are less likely to have such patterns. In fact, as a WW trader, you want the 4-5 path to be carved out as smoothly as possible. Which we also have here. The Wolfe is near completion, but this alone will not give us a complete analysis. Geo's Off-Set Rule - I have defined levels at 0.75558 and 0.71548 to clearly show where the Geo's Off-Set Targets lie. Rule 1 - If WW completes at point 5, we will look at the 1-4 line as the exit point. Rule 2 - If price hits 5', we will look at point 4, 0.71548, as the exit point. Rule 3 - If price hits 5" we will look at point 3, 0.75558, as the exit point. Fib Clusters - There are 2 Fibonacci Extensions I chose to display in this chart. The first one is the one on points 1 & 2. This gives us a maximum excursion point at which price will need to reach in order to complete the 1.618 ratio. The next Fibonacci Extension is used on the final leg down from 3-4 which gives us a 2.618 confluence zone with the previous Fib Extension. With that said, 0.78228 is the point price will need to reach in order to reverse its direction. If this pair moves quickly we may touch the 5' line defined, which would give us a high probability target of 0.71548 as an exit. If price does not reach the 5' line I still expect 0.71548 to remain a high probability target. Best, Chartistry
Short
by GWaves
2