Forex Trading Australia, FX Trading Strategies

Dealer chatter increasingly focuses on the possibility that USD has become the funding currency of choice for the carry trade, due to its emergence as the cheapest to borrow on the global block. The theory certainly explains the strong negative correlation between USD and risk acceptance, as well as the strong direct correlation between AUD/USD and NZD/USD, and the S&P 500 stock index—the emerging signs of global financial stabilisation would tend to move the funding currency down, and the growth currencies and stock indices up. Read More

Ranges broke this forex trading week as investors positioned for global growth and stronger inflation, pushing gold and crude oil higher with the commodity dollars in tow, while ignoring warnings from central bankers regarding the weak and bumpy recovery expected.

Australia lost 15K jobs in August; a fall in the participation rate kept unemployment at 5.8%. September Westpac consumer confidence rose to 5.2%, NAB August business conditions to 4 and business confidence to 18, and August construction PMI to 42.4; however, July retail sales fell −1.0% m/m, home loans −2.0%, and investment lending −4.0%. AUD/USD surged 1.6% this week on Chinese data, surging through strong resistance at 0.8450 but stopped by 0.8655, closing at 0.8626. Read More

The long-awaited break may finally be shifting forex trading summer ranges. EUR/USD, AUD/USD, NZD/USD, XAU/USD, and USD/CHF all pushed through stubborn support and resistance levels as USD set new lows for the year; USD/CAD initiated an attempt but turned at support and reversed its run as the day’s only Canadian fundamental announcement, July building permits, printed a shocking −11.4% m/m drop rather than the expected 0.4% rise. Read More

Despite undeniably improving fundamental data, investors continue to question the sustainability of the recovery. In the week, volatility spiked higher, taking the VIX close to 30 before easing, while currency liquidity remained thin, most ranges held, and gold spiked to close at US$993.65.

The RBA left rates at 3.0% and issued a cautious statement, as 2Q2009 GDP printed 0.6% q/q, 0.6% y/y. August TD Securities inflation estimate weakened to 1.7% y/y, 2Q2009 company operating profits fell −7.8% q/q, and July private sector credit slowed to 3.0% y/y. August PMI improved to 51.7 manufacturing, 48.0 services. 2Q2009 current account balance printed a deficit of AU$13,347Mn, the July trade balance a deficit of AU$1156Mn. AUD/USD surged above resistance at 0.8450 on the gold-bug spike after falling earlier, closing at 0.8507. Read More

The RBA meets Tuesday, 1 September; although there is a chance of a 25bps rate hike from the current 3.0%, it’s more likely they’ll await further data to confirm the recovery. Fundamentals to date remain encouraging, with 2Q2009 private CAPEX rising 3.3% q/q, 2Q2009 construction work done down only −0.1% q/q, and August DEWR skilled vacancies turning positive at 1.0%. AUD/USD despite the data could not break from the August range, spiking through but not holding gains above resistance at 0.8450, closing at 0.8415. Read More

The hoped-for August break from EUR/USD summer ranges didn’t happen, as investors’ opinions on the sustainability of the global economic recovery remain mixed. However, September is historically the most volatile month in forex trading, and a range breakout therefore remains possible within the next few weeks.

Below is an updated version of the daily EUR/USD chart, as referenced in a previous article. The ranges are marked in yellow horizontal lines, at 1.2329 (representing the lowest reaches of the post-Lehman panic), 1.3090, 1.3750, 1.4340 (the upper boundary of the current range), and 1.4870. The vertical pink line on the left indicates where the price action rose into the range marked C; the one on the right marks the date when the previous article was written: Read More

As the most volatile of months for forex trading approaches, many currencies and commodities, including USD, gold, and crude oil, are all trading near significant pivotal levels. Equities markets in China whipsawed at the week’s end, the S&P500 rose to 2009 highs, and global central bankers, including Fed Chairman Bernanke, proclaim the cusp of recovery even as they warn of continuing dangers.

The June Westpac-MI leading index improved to −3.3% from −5.3% previous. AUD/USD maintained its August range between 0.8160 and 0.8450, testing its lower levels early in the week and closing at 0.8332. Read More

Week ending 14 August 2009 and the range goes on. Chinese equities indices declined sharply amid worries the rally was overdone, with fundamental data not meeting investor expectations.

RBA Governor Stevens announced the next rate movement would likely be a rise. June investment lending fell −1.8% m/m. July business confidence improved to 10, business conditions to 1. August Westpac consumer confidence rose 3.7% m/m after July’s 9.3% surge, as inflation expectations rose to 3.5%. AUD/USD despite several wild swings remained within the upper portion of its range, posting a ten-month, post-Lehman high of 0.8477 and closing at 0.8302. Read More