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Australiandollar

AUDAustralian dollar looks like a buy relative to US dollar. The Australian dollar the copper have a high correlation of movement between them. Copper has recently made new all time highs in US dollar terms. The Australian dollar has not made a move yet versus the US dollar while many other commodities have made upwards moves. Australia is a natural resources rich continent with many commodities and it typically booms when commodity prices are high. I think with a coming reevaluation of the US dollar, many people will reprice currencies of countries with a high concentration of commodities higher against the US dollar, essentially backing a country's currency with its commodities.
COMEX:HG1!Long
by ngordon
GBPAUD: Key Level & Potential Pullback 🇬🇧 🇦🇺 Hey traders, GBPAUD is falling sharply. The pair lost more than 4% of its value since January. Ahead is a key level. To catch a pullback from that watch a falling wedge pattern on 1h time frame. Your trigger to buy will be its bullish breakout. Then the price will most likely bounce to 1.86 level. In case of a bearish breakout of a yellow zone, the setup will be invalid and a further decline will be expected. ❤️Please, support this idea with like and comment!❤️
Long
by VasilyTrader
10
Today’s Notable Sentiment ShiftsAUD – The Australian dollar hit a one-year high against the euro on Wednesday as investors were attracted by Australia’s status as a net energy exporter and distance form Europe’s troubles. Explaining Australia’s improving outlook, RBC Capital Markets notes that “a strong household balance sheet with scope for consumption to move back to its pre-COVID path, backlog of dwelling activity, and recovering confidence underpins our expectation for a strong 2022 and above trend growth.” CAD – The Canadian dollar rose across the board as the Bank of Canada hiked interest rates for the first time since October 2018 despite recent financial market volatility due to the crisis in Ukraine. Indeed, Convera Canada ULC noted that “there was a good deal of uncertainty as to how they would respond to the geopolitical events and they stuck to their knitting pretty firmly.” Adding that the BoC’s concern about inflation pressures did a lot “to cement expectations for future interest rate hikes.”
by thunderpips
2
AUDUSD 2H TA : 03.02.22 : BearishAs you can see the price returned to it's bearish OB zone and reacted negatively ... I ecpect the price to fall more and reach to its bearish targets . First target is 0.7205 and second target will be 0.7175 ! Follow us for more analysis & Feel free to ask any questions you have, we are here to help. ⚠️ This Analysis will be updated ... 👤 Arman Shaban : @ArmanShabanTrading 📅02.Mar.22 ⚠️(DYOR) ❤️ If you apperciate my work , Please like and comment , It Keeps me motivated to do better ❤️
Short
by ArmanShabanTrading
GBPAUD KEEPS FALLINGSince Europe and UK would be hit hardest from fuel supply insecurity and the measures against the Russian Federation, investors moved their capital in less riskier currencies and GBP was hit by a sell-off. On the other hand, Australia is not endangered by fuel supply insecurity, but the Reserve Bank of Australia did not raise the interest rate due to the concern that the wages will fail to keep up with the price increases. Currently both MACD and RSI are showing a slowing down trend, but it is still early for a reversion. If the trend continues it might try to test it's previous resistance of 1.8248 from December. If we observe a reversion on the other hand, the instrument will first try its resistance of 1.8375. Risk Disclosure: Trading Foreign Exchange (Forex) and Contracts of Difference (CFD's) carries a high level of risk. By registering and signing up, any client affirms their understanding of their own personal accountability for all transactions performed within their account and recognizes the risks associated with trading on such markets and on such sites. Furthermore, one understands that the company carries zero influence over transactions, markets, and trading signals, therefore, cannot be held liable nor guarantee any profits or losses.
Short
by legacyFXofficial
AUD CAD - FUNDAMENTAL DRIVERSAUD FUNDAMENTAL BIAS: WEAK BULLISH 1. Monetary Policy At their Feb meeting the RBA delivered on expectations by announcing an end to QE purchases, and also upgrading inflation and employment forecasts. These were seen as hawkish developments, but the bank tried as hard as possible to still keep up a dovish impression by saying the ceasing of QE does not imply near-term rate increases and stating that it’s still too early to conclude that inflation is sustainably within the target band despite recent CPI prints. The bank maintained their view that the cash rate will not increase until inflation is sustainably within the 2%-3% target band. Now, call me crazy, but on that front, the bank’s projections forecast inflation to reach close to 3.25% this year and then see it returning to 2.75% during 2023, which surely implied ‘sustainable’ inflation. Comments from Gov Lowe the following day were slightly less dovish though by acknowledging that achievement of their inflation and employment goals are within reach. He also noted that even though it remains to be seen if rates will increase this year, there are clearly scenarios where the bank would be hiking this year (which was a step away from the tone and language used in the statement) but added that it’s still plausible that a first-rate hike is a year or more away. The February decision and tone could be summed up as an incremental step away from ultra-easy policy and means we have changed our Dovish stance for the bank to neutral. 2. Idiosyncratic Drivers & Intermarket Analysis Apart from the RBA, there are 4 drivers we’re watching for the med-term outlook: Recovery – unlike other nations where growth & inflation is expected to slow, Australia is expected to see a solid post-covid recovery China – With the PBoC stepping up stimulus & expectations of further fiscal support expected in 1H22, the projected recovery in China bodes well for Australia as China makes up close to 40% of Australian exports. However, the AUKUS defence pact could see retaliation against Aussie goods and is worth keeping on the radar. Commodities – Iron Ore (24% of exports) and Coal (18% of exports) keep grinding higher and if China’s recovery starts to build some momentum, they should remain supported. 3. Global Risk Outlook As a high-beta currency, the AUD usually benefits from overall positive risk sentiment as well as environments that benefit pro-cyclical assets. Thus, both short-term (immediate) and med-term (underlying) risk sentiment will always be a key consideration for the AUD. 4. CFTC Analysis Stretched positioning are usually a contrarian indicator and warning of potential squeezes. Thus, right now the AUD might be more sensitive to positive data or developments compared to negative ones as a lot of bad news has been priced in. 5. The Week Ahead Right now, we think the Australian economy is well-placed compared to its peers as its economic is expected to recover alongside that of China (after going through a slowdown) just as other major economies are expected to slow down. Even though markets have been pricing in a steep rate path for the RBA, we still think the large netshort positioning means lots of catch-up potential for the AUD when the RBA eventually turns hawkish. Even though last week’s wage index printed slightly below target, market consensus still looks for 3% in Q2 and 3.5% by Q3, which means as long as inflation stays high (no expectation for that to slow as yet) and the labour market remains tight and growth keeps on recovering, the RBA should be next in line to tilt more hawkish, with a hike in rates very likely by the middle of the year. Despite the geopolitical risks these past few weeks, the AUD has remained very resilient, a good sign for our med-term upside expectations. This week we have the RBA, and even though they are not expected to shift their tone drastically just yet, the market has largely ignored the dovish language recently, and we would expect them to do so in the week ahead as well. For the week ahead, we have preliminarily shifted our currency bias for the AUD from neutral to bullish, but keep in mind that the AUD has seen a few weeks of solid gains recently, which means seeing some reprieve lower should not be much of a surprise. However, we are looking for any decent moves lower in the AUD as opportunities to get back in on the long side. However, given the weekend’s news of additional sanctions, this upcoming week is set to be very risk sentiment driven so keep that in mind as well. CAD FUNDAMENTAL BIAS: NEUTRAL 1. Monetary Policy Despite STIR markets pricing in close to an 80% chance of a 25bsp hike, the BoC chose to leave rates unchanged at their Jan meeting. However, the bank removed its extraordinary forward guidance and said they now think the economic slack has been absorbed (previously expected to occur somewhere in the middle quarters of 2022). The bank also explained that they expect rates will need to rise based on the progress of inflation, and Gov Macklem explained their only reason for not hiking was uncertainty surrounding Omicron. The statement gave a clear signal that a March hike is on the table. Furthermore, on the balance sheet the bank delivered on expectations by noting they will likely exit the reinvestment phase as rates begin to rise. Even though 2022 inflation projections were upgraded, the bank also downgraded growth forecasts (which in our view remains a key reason why current STIR market expectations are not realistic). Thus, the meeting had both dovish and hawkish elements to it, and thus means we are still happy to hold to a neutral bias for the CAD. 2. Intermarket Analysis Considerations Oil’s massive post-covid recovery has been impressive, driven by various factors such as supply & demand (OPEC’s production cuts), strong global demand recovery, and of course ‘higher for longer’ than expected inflation. Even though Oil has traded to new 7-year highs, we think the current Russia/Ukraine tensions and recent tight capacity concerns are the biggest contributors to the upside. We maintain a view that thinks there is greater risks of med-term downside due to: Synchronised policy tightening from DM central banks targeting demand, slowing growth and inflation, lower inflation expectations (due to the Fed), a consensus that is very long oil (growing calls for $100 WTI), a very steep backwardation futures curve which usually sees negative forward returns, heightened implied volatility. However, recent geopolitical risks have been a key focus point for oil and means escalation and de-escalation will be important to watch. 3. Global Risk Outlook As a high-beta currency, the CAD usually benefits from overall positive risk sentiment as well as environments that benefit pro-cyclical assets. Thus, both short-term (immediate) and med-term (underlying) risk sentiment will always be a key consideration for the CAD. 4. CFTC Analysis We think the recent price action and positioning data has seen the CAD take a very similar path compared to April and Oct 2021 where markets were way too aggressive and optimistic to price in upside for the CAD, only to then see majority of it unwind. However, with almost 3 weeks of straight downside we do want to be mindful of the possibility of some short-term upside, especially if the weekend sanction news sees further Oil upside. 5. The Week Ahead Focus for the CAD is threefold this week with risk sentiment, Oil and the BoC in focus. On risk sentiment and Oil, it’s a mixed bag for the CAD. Even though the oil market’s initial reactions to escalation and de-escalation were as expected, we did see the impact fading this week as some focus returned to the possibility of an Iran nuclear agreement came back on scene. With risk sentiment, any further escalation is expected to be negative for risk sentiment (negative for the CAD) and any de-escalation is expected to be positive for risk sentiment (positive for the CAD). Just keep in mind that even though oil prices started to react less to geopolitical risks this past week doesn’t guarantee that it will continue to do so in the week ahead. However, if oil prices do react stronger to geopolitical risks that will make the CAD a tricky one to trade as oil and risk sentiment would move inverse to each other and mean the CAD could have both a push and pull effect on the CAD. For the BoC, the market continues to price in a 100% probability of a 25bsp hike this upcoming week. We think there is a real risk that the decision is poised to be a ‘dovish’ hike, as the bank will want to keep the hiking going due to inflation but would want to leave some optionality by recognizing the potential damage the recent border protests could pose for growth and consumer sentiment in general. There is also the Russia/Ukraine war which complicates things for central banks right now, and given that uncertainty it would make sense for the BoC to walk back some of the aggressive pricing embedded into STIR markets.
by thunderpips
5
EURAUD: Important Resistance Ahead! Your Plan: 🇪🇺 🇦🇺 EURAUD is falling sharply. Ahead is a major rising trend line on a daily. To buy from that with a confirmation, pay close attention to a falling wedge pattern on a 4H time frame. First, let the price reach the trend line, then wait for a bullish breakout of the resistance of the wedge as your confirmation. Your initial target will be 1.582 In case of a bearish breakout of a trend line, a bearish continuation will be expected. ❤️Please, support this idea with like and comment!❤️
Long
by VasilyTrader
23
AUD USD - FUNDAMENTAL DRIVERSAUD FUNDAMENTAL BIAS: NEUTRAL 1. Monetary Policy At their Feb meeting the RBA delivered on expectations by announcing an end to QE purchases, and also upgrading inflation and employment forecasts. These were seen as hawkish developments, but the bank tried as hard as possible to still keep up a dovish impression by saying the ceasing of QE does not imply near-term rate increases and stating that it’s still too early to conclude that inflation is sustainably within the target band despite recent CPI prints. The bank maintained their view that the cash rate will not increase until inflation is sustainably within the 2%-3% target band. Now, call me crazy, but on that front, the bank’s projections forecast inflation to reach close to 3.25% this year and then see it returning to 2.75% during 2023, which surely implied ‘sustainable’ inflation. Comments from Gov Lowe the following day were slightly less dovish though by acknowledging that achievement of their inflation and employment goals are within reach. He also noted that even though it remains to be seen if rates will increase this year, there are clearly scenarios where the bank would be hiking this year (which was a step away from the tone and language used in the statement) but added that it’s still plausible that a first-rate hike is a year or more away. The February decision and tone could be summed up as an incremental step away from ultra-easy policy and means we have changed our Dovish stance for the bank to neutral. 2. Idiosyncratic Drivers & Intermarket Analysis Apart from the RBA, there are 4 drivers we’re watching for the med-term outlook: Covid - so far, the RBA has been optimistic about the recovery, but incoming employment and inflation data will be crucial to see if that optimism is justified. China – Even with PBoC stepping up stimulus & fiscal support expected in 1H22, the Covid-Zero policy poses a risk to China’s expected 2022 recovery and incoming data will be important. Politically, the AUKUS defence pact could see retaliation against Australian goods and is worth keeping on the radar. Commodities – Iron Ore (24% of exports) and Coal (18% of exports) are important for terms of trade, and with both pushing higher on PBoC easing, it’s a positive for the AUD if they remain supported. Global growth – as a risk proxy, the health of the global economy is important, which means expected slowdown in growth and inflation globally needs monitoring, but if China’s recovery is solid the fall out could be limited for the AUD. 3. Global Risk Outlook As a high-beta currency, the AUD usually benefits from overall positive risk sentiment as well as environments that benefit pro-cyclical assets. Thus, both short-term (immediate) and med-term (underlying) risk sentiment will always be a key consideration for the AUD. 4. CFTC Analysis Stretched positioning are usually a contrarian indicator and warning of potential squeezes. Thus, right now the AUD might be more sensitive to positive data or developments compared to negative ones as a lot of bad news has been priced in. This week all eyes are on the Wage Index data as well as risk sentiment of course. 5. The Week Ahead The time has finally arrived! This week will finally see the long-awaited and anticipated Wage Index data for Australia. Why is this such a big deal? Well, the RBA is obsessed with wage growth as they believe that without wage growth returning to close to 3% the chances of the bank reaching sustainable inflation within their target range is not possible. With Unemployment at 4.2%, CPI at 3.5% and GDP at 3.9%, the only piece of the puzzle that the bank needs to make their highly anticipated shift in policy is wage growth. In the bank’s defence, the historical chart for wage growth looks dismal, and despite recent upside we are still at historical lows. The trade is quite simple for wages, where a beat above the market’s maximum expectations is expected to see decent upside for the AUD as that will arguably see markets price in a policy shift from the RBA, while a miss below the market’s minimum expectations could see STIR markets coming back to earth and price out some of the 6 hikes priced for the bank this year. Apart from the wage index data, the other focus point will remain on risk sentiment with the ongoing tensions between Russia and Ukraine, where escalation is expected to be negative for risk sentiment (negative for the AUD) and any de-escalation is expected to be positive for risk sentiment (positive for the AUD). USD FUNDAMENTAL BIAS: BULLISH 1. Monetary Policy The Jan FOMC decision was hawkish on multiple fronts. The statement signalled a March hike as expected, but Chair Powell portrayed a very hawkish tone. Even though Powell said they can’t predict the rate path with certainty, he stressed the economy is in much better shape compared to the 2015 cycle and that will have implications for the pace of hikes (more and faster). Furthermore, he explained that there is ‘quite a bit of room’ to raise rates without damaging employment, which suggests upside risks to the rate path. A big question going into the meeting was how concerned the Fed was about recent equity market volatility . But the Chair explained that markets and financial conditions are reflecting policy changes in advance and that in aggregate the measures they look at isn’t showing red lights. Thus, any ‘Fed Put’ is much further away and inflation is the Fed’s biggest concern right now. The Chair also didn’t rule out the possibility of a 50bsp hike in March or possibly hiking at every meeting this year, which was hawkish as it means the Fed wants optionality to move more aggressive if they need to. We didn’t get new info on the balance sheet and Powell reiterated that they’re contemplating a start of QT after hiking has begun and they’ll discuss this in coming meetings. Overall, the tone and language were a lot more hawkish than the Dec meeting and more hawkish than consensus was expecting. 2. Global & Domestic Economy As the reserve currency, the USD’s global usage means it’s usually inversely correlated to the global economy and global trade. Thus, USD usually appreciates when growth & inflation slow (disinflation) and depreciates when growth & inflation accelerates (reflation). With expectations that growth and inflation will decelerate this year that should be a positive input for the USD. However, incoming data will also be important in relation to the ‘Fed Put’. There are many similarities between now and 4Q18, where the Fed were also tightening aggressively going into an economic slowdown. As long as growth data slows and the Fed stays aggressive that is a positive for the USD, but if it causes a dovish Fed pivot and lower rate repricing it would be a negative input for the USD. 3. CFTC Analysis With the USD still sitting on the biggest net-long position for large specs and leveraged funds, the odds of mean reversion are always higher, especially with more than 6 hikes priced in for the Fed. However, if there is enough demand for safe havens due to further Russia/Ukraine challenges then positioning might not matter too much. 4. The Week Ahead It’s a relatively quiet week for the US on the data front. Tuesday kicks off with Markit Flash PMI’s where focus will be on whether the recovery in Retail Sales and Industrial Production was also felt in the forward-looking and sentiment-based PMI’s. In terms of USD reaction, as both are growth measures, there is the chance the USD sees a similar inverse reaction like we’ve seen with other growth measures in recent weeks. On the inflation side we do have the Fed’s preferred measure of inflation (Core PCE ) on the schedule for Friday. As the Fed has tunnel vision for inflation right now the print will be important for us to watch. After a solid beat in CPI and PPI the market is skewed towards an upward surprise, which means it will arguably take a very sizable move above maximum expectations to see a meaningful bullish reaction in the USD and US10Y , while it also means that a surprise miss, especially after CPI and PPI can have an outsized reaction to the downside for both. Fed speak will also be watched to see whether appetite for a 50bsp hike has grown. Keep in mind the Fed’s blackout period for the March meeting starts next week Friday (5 March), so any prep of a potential 50bsp move needs to be communicated clearly by the Fed before then in order to avoid jumping that type of surprise on markets when they don’t expect it. Risk sentiment will once again be a key potential driver for the USD given the heightened geopolitical risks around Russia and Ukraine. Any risk off flows from further fears of invasion or actual escalations should be supportive for the USD as the world’s reserve currency and a safe haven, while strong de-escalation is expected to be negative driver in the short-term.
by thunderpips
2