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.
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