Aussie GDP figures help our trades | Is the Euro on the verge?

The news from Down Under overnight (GMT) that Australian GDP figures were less than stellar, by Australian standards, has revived expectations of a further reduction in the Reserve Bank of Australia (RBA) cash rate. This, in turn, has translated into immediate gains for our trades involving the Aussie dollar and the New Zealand dollar. We had taken off half from the AUDNZD position, which dates from last week, and moved our stop to Break-Even, as is our policy, and now the other half is heading further into profit. The Silver Trigger is following, locking in profit as it goes.

In the meantime the trade we initiated yesterday, in the New Zealand dollar against the US unit (NZDUSD), is now also in profit.

We continue to watch gold as it comes closer and closer to the support that we highlighted yesterday. A break through here is certainly on the cards, which will almost inevitably be followed by a short squeeze. For this reason we are initiating a position. Our initial profit target will be judged to attempt to take advantage of the expected short squeeze.

The Aussie dollar has already started to price in an interest rate reduction and the only consideration here is to watch for an entry point.

While we await the ECB press conference tomorrow we cannot help but notice that the market is signalling that it is not expecting any further rise in the Single Currency against the US dollar. Evidence of this can be seen in the chart below:

Here it can be seen that the last high failed to go above its predecessor. A breach of the support at 1.35244 would possibly initiate a trend reversal. To be more specific, a daily close below this level (see daily chart below) would be a compelling signal for a high probability short trade.