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Shortaudusd

Short Audusd : Broadening Wedge Breakout Hi Guys, After consolidating for last few sessions, we got breakout in AUDUSD, wait till this hourly candle close and ensure it broke the broadening wedge lower trendline. After valid analysis initiate shorts in AUDUSD based on your risk reward with stops above previous swing high aiming for 0.7600's as Target 1 in Audusd. Note : Current Audusd ( hourly candle) didn't close below lower trendline of the wedge, short only after valid breakout. Never be in hurry to trade. Happy Trading !
by InsiderB
AUDUSD: FUTURE DIRECTION? BUY THE BREAKOUT; SELL THE TRIPLE TOPPost RBA has left Aussie in a somewhat uncertain direction; whilst the 25bps cut last week should have seen us offered to at least the 0.74 low support level, instead weve seen persistent aussie bids, even despite the strong USD employment report and consequential increased rate hike odds. Much of this Aussie topside is a function of investors shifting macro strategies from a monetary policy stance to a yield seeking/ rate differential positionings; further aussie downside was unhelped by the RBA's rate statement & SOMP which failed to offer any forward guidance regarding further policy, or hint at any FX levels which they thought were too high. Despite this I have seen several sell-side houses offer particularly dovish outlooks for the RBA - with 2 or more rate cuts and potentially new unconventional methods being used by end of 2017. My personal view is a mixed one. Whilst Aussie lower at these levels makes sense e.g. rate cut last week seemingly yet to be priced, we are at a double top resistance level that has held when the rate was 1.75 so should hold now the rate is lower. However, whilst this is the case in the immediate term aussie is still trading better bid, which is interesting given kiwi is trading with a slightly biased offered tone even though kiwi still has the better carry at 2.25% vs 1.5% - this could be a signal the market expects the RBNZ to be more aggressive in their policy decision on the 10th and/ or they will be more dovish and assertive with their forward guidance, which i agree is likely given the RBNZ has said several times it is not happy with kiwi at these levels and is likely to use policy tools to combat this. So on this note, if AUD$ holds the 0.768 level and fails to close on the daily above this (and shows 1/2 red dailies lower) this wiLl show the bias has confirmed to the downside and I will sell aussie to 0.750tp1 and 0.743tp2. Alternatively, given aussies topside bias, and the factors mentioned above, it is highly possible that the bulls win and AUD$ breaks higher - if we see a daily close above the 0.768 highs this imo will likely confirm the breakout and my bias until 0.778 is bullish thus I will buy the break with a 0.775tp1 and 0.778tp2. Today USD strength is firming as the fed funds rate implies a sept p=18% that the fed hikes up from 12% yesterday - though on the data side we are pretty quiet, with retail sales the only notable print which is on Friday. On the AUD side Gov Stevens from the RBA will be speaking later this week... hopefully he sets a bearish aussie tone and helps us move lower, but either way i think AUD$ is a solid trade. The breakout will see alot of momentum imo as a high % of bears will have stops ust above the 0.768 level (given the double top resistance) so we would likely short squeeze those stops 30pips higher immediately once their level has broken. Further, a confirmed rejection at the 0.767 level should see the bears take over (as they have done in the past 2 times), hence my high conviction on this trade.
by QuantumLogicTrading
3
AUDUSD: RBA SOMP HIGHLIGHTS - NFP GUIDANCE FROM HEREThe RBA was relatively neutral on the margin, keeping their inflation targets the same at 1.5-2.5. However, unfortunately for aussie shorts the RBA didnt offer any forward guidence on sentiment towards further easing, or specific reference to the aussie FX level - despite there being a strong bid bias brewing in the aud$ cross post-25bps cut. Also their forecasts for underlying inflation imo were quite positive at 1.5% vs 1.0% currently - this infers the RBA perhaps even thinks that the 1.5% rate will be sufficient to reach their inflation target, and that another cut this year isnt being thought about given they predict on target inflation with current policy. Although this does then run the downside risk of inflation staying low (as i expect) which may force the RBAs hand to cut again at years end if inflation is below 1.% or another print that misses the 1.5% expected mark. At these levels aussie looks attractive on the offer with a 0.74xx target - however USD supply has been strife since last week when rate expectations sold off amid poor GDP print to just p12% in september - down from 25% earlier in the week.. this week failed to improve, with little impetus for this to be the case, though the greenback now looks to NFP today for guidance. A beat/ firm print should help aussie offer well at these levels given we are right at the double top 0.766 level, so any USD strength arising from the NFP print has a bias to see AUD$ move lower, though as the macro landscape questionably is changing, it is uncertain if it will be enough to surpress yield seekers demand for aussie deposits for long/ a sustained period (if at all), which is expecially odd since we saw the rate brought down this week whihc should have set a bearish tone for the week, as we have seen with the BOE and GBP. After NFP we will have a clearer view. From here i think aussie positioning should be sidelined until the NFP print is clear - a miss and i actually think Aussie is better to trade bid, with 0.78 a firm target. A NFP hit and that should offer aussie lower, though for some reason I see the risk asymmetrically skewed to aussie topside, given the very week reaction to what is/ should be the biggest fundamental driver possible - a rate cut. So much of this trade is being vigilant - an NFP miss, buy a 0.766 confirmed breakout, a NFP hit - ensure AUD$ is trading with a clear bid bias.. any 10-30pips movement lower will not suffice at these levels, aussie is still likely bidding. RBA Minutes Highlights: - Underlying Inflation To Remain Under 2% For Much Of Forecast Period, Reach 2 % By End 2018 - Prospects For Economy Positive, But Low Inflation Allows For "Even Stronger Growth" - Judged Risks Associated With Rising House Prices And Debt Had Diminished - A$ Remains Significant Source Of Uncertainty For Inflation, Growth Forecasts - Economic Growth And Inflation Forecasts Little Changed Overall - Forecasts Underlying Inflation 1.5% By End 2016, 1.5-2.5% End 2017, 1.5-2.5% End 2018 - Forecasts GDP Growth 2.5-3.5% End 2016, 2.5-3.5% End 2017, 3-4% End 2018 - Says Unemployment To Fall Only A Little Out To 2018, Employment Growth To Be Modest This Year - Drag On GDP From Falling Mining Investment Looks To Have Peaked, Non-Mining Still Subdued - Dwelling Investment To Stay Strong For Next Year Or So, But Raises Risk Of Oversupply - GDP Growth Looks To Have Moderated In Q2 As Net Exports Added Less - Wage Growth Expected To Remain Low, Rise Modestly Out To 2018 - Increasing Supply, China Steel Cutbacks To Put Downward Pressure On Iron Ore Prices - Growth In China Expected To Slow Gradually Over Next Few Years, Housing A Risk - Brexit To Have Limited Effect On Australia's Major Trading Partners
by QuantumLogicTrading
11
LONG USD VS AUD, GBP, NZD: FED EVANS SPEECH HIGHLIGHTSFed Evans was the third fed member this week to hint that at least one rate increase is on the cards, though more dovish in saying "one hike could be appropriate" vs saying "expect the fed to hike at least once this year" which we heard from Dudley/ Kaplan earlier in the week. Though in reality his speech was dovish on the margin and offered little help for the wiltering green back which has fallen 6 of the last 7 days. The most USD shunning comment was " Could See One More Rate Increase This Year 'Even Though I Prefer None'" which obviously offers no help for the USD. Nonetheless from here and at these levels i continue to see alpha in long USD vs AUD above 0.76 and GBP above 1.33 as the RBA cut the interest rate on tuesday which imo will likely be priced into a imminent 0.74xx sell-off once this USD weakness fades, and as the BOE likely also eases tomorrow which should see cable trade into the low 1.30s if now 1.28s or beyond. NZD is also a good proxy short as the RBNZ is expected to ease by 25-50bps on the 10th which should see kiwi trade into 0.69xx or 0.67xx respectively. Whilst USD weakness is likely exacerbated by Fed Evans dovish remarks - today the federal funds futures ticked higher, as the BOJ-miss induced safe haven demand eased today after several days of selling off and the implied prob of a sept hike steepened to 18% vs 12% yesterday.. if the Rates market can hold these gains into fridays NFP we will likely see USD trade with a bid bias vs the above. The risk going forward though in the next 1-2wks is a poor NFP print.. if we miss expectations considerably this could send USD into a selling spiral, though a firm or beat print i confidently believe will see DXY regain prowess as many of its crosses trade at attractive USD long levels e.g. EUR, GBP, AUD, NZD etc. Fed Evans Speech Highlights: Fed's Evans: One Rate Increase for 2016 Could Be Appropriate Evans: Need More Confidence Inflation Headed to 2% Evans: Could See One More Rate Increase This Year 'Even Though I Prefer None' Evans: One More Increase Close Enough in Line With Views Evans: Wouldn't Mind Waiting to Raise Rates Until Economy Stronger Evans: Recent GDP Data Was Disappointing Evans: Ability to Continue Growing Jobs A 'Pretty Good Sign' Evans: Fed Isn't 'Behind The Curve' on Rates Evans: Core Inflation Won't Reach 2% Until 2018 Evans: Brexit Risk Has 'Come Down' Evans: Global Economy Growing More Slowly Than Would Have Hoped Evans: U.S. Fundamentals Are 'Good' Evans: Expects 2016 GDP of 2% to 2.5% Evans: Labor Market Has Displayed Resilience Fed's Evans: One Rate Increase for 2016 Could Be Appropriate
TVC:DXYLong
by QuantumLogicTrading
BUY USD VS AUD, NZD & GBP: FOMC MEMBER KAPLAN SPEECH HIGHLIGHTSMore of the same here - my USD view remains bullish against AUD, NZD, GBP from here and at these levels. Especially on the back of the RBA i still think we should see 0.745 in AUD$ today, 0.69 in kiwi on the 10th (RBNZ), and 1.28 for GBP on the 4th (BOE) Fed Kaplan Speech Comments: Kaplan: Expects Continued Oil Price Volatility Until Year-End Kaplan: 1Q, 2Q GDP Figures Were Disappointing Kaplan Expects to See More Bankruptcies, M&A and Restructuring In Energy Sector This Year DJ News Kaplan: Dallas Fed Still Expects Full Year GDP of 2% Due to Solid Consumer Demand Kaplan: 1Q, 2Q GDP Figures Were Disappointing Kaplan: Dallas Fed Still Expects Full Year GDP of 2% Due to Solid Consumer Demand Kaplan: Dallas Fed Expects Workforce Participation Rate To Go Down to 61% by 2024 Kaplan: Has Confidence Headline Inflation Will Reach 2% In The Medium Term Kaplan: China Future GDP Growth Rates Likely to Decline Kaplan: Brexit Impacts Will Take Time to Unfold Kaplan: Removal of Accomodation Should Be Done in 'Gradual and Patient Manner' Kaplan: There Has Been Significant Decline in Neutral Rate Of Interest Last Few Years Kaplan: Expects to see one hike this year Kaplan: Decline in Neutral Rates Makes Using Monetary Policy More Challenging Kaplan: Structural Reforms, Fiscal Policy Should Be Used to Help Economies
TVC:DXYLong
by QuantumLogicTrading
SHORT AUDUSD: RBA INTEREST RATE DECISION - CUT 25BPS TO 1.50%RBA Cut the Cash rate to 1.50% by 25bps, the market has had a very subdued reaction though, barely falling 30pips from market. I still think there should be more downside here and into the mid/low 74xx before the full fade comes in - so luckily room for retails to get in, looks like the algos were having a day off today. This is positive for any kiwi$ short holders - this now puts almost certain pressure on RBNZ to do the same (if not 50bps) next week. Previously Aussie$ fell 180pips back in May 3rd on a 25bps cut like this, and the next day lost 40pips so a total of 210pips in 2days, 0.766 to 0.745 - assuming this model holds true this time we should then expect AUD$ to trade to 0.737 in 2-days given we started at 0.758. Thus the 0.744/5 target I have should be modest but inline with the subdued market reaction (TPs further to the LHS run the risk of being faded out unreached). We could/ should see some more selling through LDN/ NY as real money gets on board - unlikely to stay in the 0.75's for today (or close here imo). RBA Interest Rate Decision Highlights: -AUSTRALIA AUG RBA CASH RATE* DECREASE TO 1.50 % (FCAST 1.50 %) VS PREV 1.75 % -RBA SAYS RISING A$ COULD COMPLICATE ECONOMIC TRANSITION -RBA SAYS JUDGED ECONOMIC GROWTH WOULD BE IMPROVED BY EASING -RBA SAYS GLOBAL ECONOMY GROWING AT A PACE BELOW AVERAGE -RBA SAYS RECENT AUSTRALIAN DATA SUGGESTS OVERALL GROWTH CONTINUING AT A MODERATE PACE -RBA SAYS UNDERLYING PACE OF GROWTH IN CHINA ECONOMY APPEARS TO BE MODERATING -RBA SAYS RECENT DATA CONFIRMS INFLATION REMAINS QUITE LOW, EXPECTED TO REMAIN CASE FOR SOME TIME -RBA SAYS LESS RISK OF LOW RATES OVERHEATING HOUSING MARKET -RBA SAYS LABOUR MARKET DATA CONTINUE TO BE SOMEWHAT MIXED
Short
by QuantumLogicTrading
12
AUDUSD: RBA BANK HIGHLIGHTS - CUT & SELL OR STAND PAT & LONG?Inline with the mixed information below, i too am undecided with what the RBA will do. There are several arguments for a cut e.g. CPI falling at an alarming rate/ strong trend; strong aussie; 1.75% high yield and likely to maintain AUD strength. But several against e.g. some of the trimmed prints show stability at 1.7%; need for more data - aussie employment report etc, given the AUD only holds data reports quarterly. That said, whilst im not certain on a RBA rate cut, i am certain on an RBNZ cut (more of a 25 or 50bps cut question), so going into RBA the lower conviction and risk trade is to play it through kiwi transmission e.g. short kiwi$ - an RBA cut will put downside pressure on kiwi$ too as it increases the chance of an RBNZ cut even more as the RBNZ will seek to drive their relative yield down and NZD currency appreciation down. The release is expected at AM5:30GMT - I expect aussiedollar will lose 100-200pips from market on a 25bps cut and if they stand unchanged i expect a topside rally into the 767 resistance graveyard but terminally, with a no rate cut i think we will likely see an end of week close at the 0.782 12m high resistance level assuming the USD employment report is average. Central bank confidence trades relatively low these days in the "disappointment era! however we have seen some strong conviction with bullish bets on RBA cut positioning so far with AUD$ down 100pips+ from yesterday - the lower we move pre-RBA the nastier a disappointment rally with be but also the short downside returns diminish - we could end up only seeing 100pip dropp if we move to 745 pre-decision. BAML ON THE RBA: - We expect the RBA to cut rates this week in response to a weak inflation pulse and spare capacity in the labour markeT. - A cut should lend support to the rates curve above 40bp. We await better levels to reset AU US spread compression trades. - The AUD is benefiting from the global search for positive yield and a rate cut is unlikely to deter this supportive inflow. RBA to hold due to spot on CPI? - TDS - Analysts at TD Securities explained that the recent AUD Q2 underlying CPI was spot-on the RBA’s expectations so they don’t think this will be a trigger for the Bank to cut. RBA to cut tomorrow - MUFG -Derek Halpenny, European Head of GMR at MUFG, suggests that the Australian dollar is one of those currencies that is currently much stronger than what is implied by the 2-year swap yield spread with the US. RBA to cut 25bps at its August meeting – RBC CM -Research Team at RBC Capital Markets, expects the RBA to cut 25bps at its August meeting. RBA: Not enough grounds to cut rates in August - Commerzbank - Antje Praefcke, analyst at Commerzbank notes that even though the market widely expects the RBA to cut the interest rate by 25 basis points from 1.75% to 1.50% next Asian session, they do not see enough grounds to lower the key interest rate in August. RBS - RBA to be on hold
by QuantumLogicTrading
3
SHORT AUDUSD: EYEING CPI PRINT - SELL 1.0%YOY, 0.3%Q; RBA EASINGAM 2:30GMT Ausssie Inflation prints are released these are key for determining their August Policy Decision 1. IMO a 1.0%yoy CPI print shows a further 0.3% contraction in their yearly CPI, this should be sufficient to push the RBA to cutting their OCR by 25bps, similarly a 0.3%qoq CPI will be needed in conjunction to show that inflation is growing at a slow pace. 2. RBA Minutes that support this view of low CPI leading to a cut from July said - - On the margin RBA remained in line with previous meetings, adding little but still keeping it on the dovish side imo. Once again, as in previous minutes (and from several other central banks) RBA continued to communicate the necessity of "watching key data" to drive future policy decisions. Interestingly though, they also mentioned the negative impact of a strong AUD which in turn supports RBA doves out there as a cut is the remedy to stop a deflationairy currency in its tracks. Further, RBA notably were under no illusions regarding their inflation situation stating " inflation set to stay low for some time" - another encouraging stimulus for doves given inflation's important position/ weight for setting future policy. - As per the attached post, i remain dovish/ bearsh on aussie$, and i continue to expect a cut to 1.50% (25bps) this year given i expect their inflation to remain stagnant. Clear targets are 0.73 when probability of a cut is higher - though i would enter shorts regardless if AUD$ could find its way to its 12m highs at 0.78, though unlikely. - I like USD strength in the medium term too hence supporting the short Aussie dollar view RBA Minutes Highlights: RBA MINUTES: BOARD TO WATCH KEY DATA, WILL MAKE ADJUSTMENT TO RATES IF NEEDED; REVIEW OF FORECASTS IN AUG WILL HELP STEER POLICY - Inflation set to stay low for some time, employment mixed, retail sales look set to pick up - Stronger AUD would complicate economic rebalancing - Economic transition is now well advanced
Short
by QuantumLogicTrading
LONG DXY/ USD VS GBP: HAWKISH FOMC LOCKHART SPEECH HIGHLIGHTSFOMC Lockhart was the 4th Fed this week to imo be relatively Hawkish with his words, most notably reinforcing with the others brexits near-term stability saying "Doesn't Expect 'Brexit' to Have Near Term Impact on Economy" and " So Far 'Brexit' Reaction Largely Orderly". Most interestingly though was Lockharts view on the FOMC's positioning for future rate increases, saying "Won't Rule Out Two Rate Rises This Year" - which is extremely hawkish given most expect 1 at the most.. Back up this sentiment by insisting that the Fed is "Fed Not Behind Curve, Has Time to Decide on Next Rate Move". Nonethless Lockhart did somewhat contradict his "rate expectations" by saying "Time for 'Cautious and Patient Approach' to Rate Policy" which surely shouldn't be the case if 2 hikes are coming - that would be on the aggressive side. All in all, Lockharts comments go hand in hand with my Bullish medium term USD/ DXY view (see previous articles) - I like the USD vs EUR, JPY, GBP, AUD, NZD in the medium term so long DXY/ USD is favoured, even more so if 2 rate hikes were to be realised this year. At current levels short GBPUSD is my favourite expression FOMC RATE HIKE IMPLIED PROBABILITIES - On the likelihood of rate increases, in the past 24 hours, from the Federal Funds Rate implied probability curve we have seen rates/ probabilities firm after yesterdays "risk-break" recovery, with a 25bps September/ Nov hike steepening to 17.2% from 11.7%(Wed), and Dec setting new highs at 35.9% from 29.5% (Wed) - Dec also went on to double the probability of a 50bps hike to 5.1% vs 2.8%(Wed), giving Lockharts comments some weight. FOMC Lockhart Speech Highlights: -Fed's Lockhart: Fed Not Behind Curve, Has Time to Decide on Next Rate Move -Lockhart: Time for 'Cautious and Patient Approach' to Rate Policy -Lockhart: So Far 'Brexit' Reaction Largely Orderly -Lockhart: 'Brexit' Will Increase Long Term Uncertainty -Lockhart: Doesn't Expect 'Brexit' to Have Near Term Impact on Economy -Lockhart: Bond Market Yields Largely Reflect Flight-To-Quality Buying -Lockhart: Too Soon to Say 'All Clear' for Financial Markets -Lockhart: 'Brexit' Not a 'Leman Moment' -Lockhart: Still Expects U.S. to Grow by 2%, Expects More Job Gains -Lockhart: Economy is 'Performing Adequately' -Lockhart Says Fed Has Time to Decide on Next Rate Move -Fed's Lockhart: Presidential Election May Be Boosting Economic Uncertainty -Fed's Lockhart: Won't Rule Out Two Rate Rises This Year
TVC:DXYLong
by QuantumLogicTrading
SHORT AUDUSD TP 800PIPS: BREXIT, RBA, FED & USDJPY HEDGEShort AUDUSD is in my top 3 FX Trades for several reasons: 1. AUD is considered a riskier G10 currency cross, so AUD trades weaker in risk-off markets, or when equities/ SPX trade lower (you can see the high correlation with SPX at the bottom of the graph). - With Brexit concurring last week, global risk has increased, this is especially the case for AUD due to commonwealth connections. Therefore AUD is likely to come under pressure in the future as risk-off sentiment continues to dominate, as the US Election nears, Global growth worries continue (Japan, Europe, China) and Brexit/ uncertainty about further Euro Area exits continues to intensify - we can see Gold and US Treasuries continue to gain supporting the risk-off view and thus supporting selling AUD. Also, risk-off encourages $ buying as a safe haven deposit on the Brexit backdrop. - Further, going into earnings season next week, historically risk currencies (AUD) perform poorly as investors seek safer assets to hedge against earning surprises, thus this helps AUD selling and USD buying. Plus, most investors will want to hold some $ cash in order to fulfil their earnings based equity trading, so this also helps the short AU trade by increasing $ demand relative to AUD. 2. The RBA Meeting on Tuesday the 5th is likely to be dovish, as 1) Brexit risks are weighed in on again, after supportive/ dovish statements from RBA members following the Brexit decision and 2) AUD Macro Environment has performed poorly since the last meeting and the May Rate cut e.g. Retail sales 0.2% vs 0.3%, Unemployment flat at 5.7%. - However, I dont expect an RBA rate cut, as they cut last just 2 months ago in May by 25bps to 1.75% and their GDP print was firm at 3.1% v 2.8% yoy and 1.1% v 0.8% with Unemployment also stable (yet to see inflation), so I expect them to provide reassurance to markets with a strong dovish tone, with possible hints to a August rate cut - citing Brexit and looking forward to their end of July Inflation print as a gauge for further rate cuts. Nonetheless the dovish rhetoric should be strong enough to put pressure on AUD and tip the scales south supporting the AU short. 3. From a USD demand point of view, last week we saw USD lose 160pips against the AUD as Brexit Uncertainty negatively hit the Feds Rate hike cycle expectancy, flattening the curve in the front end which ruled out any hikes until Dec or 2017, fewer hikes = less USD strength. - However, since the beginning of the week where brexit risks ruled out hikes in the near term, the end of the week managed to turn rate hike expectations around as Brexit likelihood decreased/ shifted into 2017. This helped the Fed fund futures curve recover/ steepen somewhat in the front end, with the implied probability of a hike increasing from 0% to 5.9% for both September and November, whilst the probability of a hike in December also steepened significantly from 13.3% to 22.3% with the probability of a 50bps hike being priced for the first time at 1.1%. This trend of Fed Hike recovery is likely to continue as long as Brexit risks remain subdued, so we can expect USD to begin to price stronger in the coming days/ weeks. 4. Technically, AUDUSD trades 100pips away from a key handle at 0.76xx which is a double top and may provide the ideal short area. Further, higher than that at 0.78xx is the 12 month high which is also potentially a great level to get short from as a double top 5. Volatility - 1wk, 2wk and 1m (-1.52, -1.57, -1.60) AUDUSD Risk Reversals all trade with a downside bias indicating put/ downside demand is higher than upside, so the option market net expects AUDUSD to come down over the above tenors. - Out through the 5th, 6th, and 7th (post RBA) we see large notional OTM put options and open interest at 0.7365, 0.7440 & 0.7445 which supports the view that the RBA will be dovish and that AUDUSD is likely to hairpin around the 0.76xx double top level.
Short
by QuantumLogicTrading
4