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Australiandollar

AUDUSD - Short Idea The fundamental Bias of this pair is bearish. Most analysts and financial institutions predict a downtrend. The AUDUSD trend is bearish. In terms of CFTC data, there are more sell positions on this Retailers are also buying these assets, which gives our downtrend a better chance. Technically, the bullish channel is broken and with the pullback to the same channel, the risk position can be received to the appropriate reverb. Set your SL: 71.908 Set your TP: 71.00
Short
by Alisabbaghi
1
AUDNZD 2022-Jan-23 Trade Idea (No Indicators)AUDNZD Trade Setup Idea Analysis Using Only Trend, Horizontal Support Level, and Horizontal Fibonacci Retracement Support Level. First, identify the direction of the trend. Second, draw horizontal support level across the highs. Third, drag Fibonacci Retracement Tool from previous higher low to higher high. Next, wait for price to retrace to the level where 50% Fibonacci Retracement Level overlaps with Horizontal Support Level. Enter using a buy limit. Enter another order after a bull candle forms on the level.
Long
by TradeLive-
AUD USD - FUNDAMENTAL DRIVERSAUD FUNDAMENTAL BIAS: NEUTRAL 1. Monetary Policy In Dec the RBA kept rates at 0.10% and weekly bond purchases at A$4bln until mid-Feb, as expected. They reiterated their commitment to maintain highly supportive monetary conditions and won’t raise rates until actual inflation is sustainably within their 2%-3% target range. They noted that the economy is recovering from the Delta slowdown and is expected to return to pre-Delta path in 1H22. The positive take from the meeting was that the RBA did not think Omicron will derail the expected recovery and sounded more optimistic than markets anticipated. They also said they will consider the future of their QE program at the Feb meeting and outlined their criteria for that which includes actions of other central banks, bond market functioning and actual and expected progress towards the goals of full employment and inflation consistent with their target. All in all, the bank still had a dovish stance but was more optimistic about the economy than expected. Furthermore, out of the 3 criteria set by the bank, the first two is arguably a green light already, which means the only thing we are waiting for after last week’s solid jobs print is this week’s incoming QQ CPI print. 2. Idiosyncratic Drivers & Intermarket Analysis There are 4 key drivers we’re watching for Australia’s med-term outlook: The virus situation – so far, the RBA has been positive about a post-Delta recovery, but incoming employment and inflation data will be crucial to see whether that optimism is justified. China – Even though the PBoC has finally stepped up with new stimulus & some fiscal support is expected in 1H22, the Covid-Zero policy in China does pose a risk to their expected 2022 recovery so the recent rapid rise in cases is one to watch. Politically, the AUKUS defence pact could see possible retaliation from China against Australian goods and is always something to keep on the radar. Commodities – Iron Ore, (24% of exports) and Coal prices (18% of exports) are important for terms of trade, and with both pushing higher on PBoC easing, that is a positive for the AUD as long as they maintain their recent push higher. Global growth – as a risk proxy, the global economy is an important consideration for AUD, which means the expected slowdown in growth and inflation globally is an important point to consider, but if China can put in a solid year that should limit the fall out of a faster slowdown in the global economy. 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 Latest CFTC data showed positioning change of +3032 with a net non-commercial position of -88454. As outsized net-shorts are usually seen as a contrarian indicator we want to be mindful of potential squeezes higher for the AUD, which also means that the AUD is most likely going to be more sensitive to positive data or developments compared to negative ones because a lot of the bad news has been priced in. The recent downside in equities have kept the AUD pressured, but it was encouraging to see that despite the downside that the AUD managed to see some minor unwinding of net-shorts, and as the most recent CFTC update did not include Thursday’s reaction to the good jobs report, we would expect to see more unwind with next week’s data. 5. The Week Ahead The most important data point for the AUD in the week ahead is the upcoming quarterly CPI data scheduled for Tuesday. Recall that the RBA gave us three criteria they will be watching to determine the future of their asset purchase program, and with 2 of those 3 criteria arguable already confirmed, the only thing left is the economic data. After the solid jobs data last week, CPI is the final piece to the puzzle, and if we can see a solid print, it should see consensus pricing in an end to the QE program at next week’s meeting. Consensus sees the YY measure climbing to 3.2% and QQ climbing to 1.0% (unchanged expected for Trim & Weighted). According to Westpac there is downside risks from household goods and furnishings while there are upside risks from dwelling prices. Apart from CPI, as a high beta the overall risk sentiment after last week’s equity bloodbath will also be an important focus point for the AUD in the week ahead. USD FUNDAMENTAL BIAS: BULLISH 1. Monetary Policy The Fed turned a lot more hawkish than expected in Dec. They doubled the pace of tapering to $30 billion per month which will see QE concluded by March 2022 as was widely expected. Surprisingly though the Summary of Econ Projections showed the median dot plot pencilled in 3 hikes for 2022 (up from the previous 1), confirming Fed Fund Future expectations. Fed Chair Powell explained they hadn’t decided whether to pause between the end of tapering and a first hike but reiterated that rates will likely only rise when QE has concluded. Another positive shift was Powell’s comments that they could raise rates before full employment has been met due to high inflation , and stated that with inflation above target, they cannot wait too long to get to maximum employment as current inflation levels is seen as a threat to max employment. The hawkish tilt went further to note that the bank started discussing the balance sheet but said no decisions were made on when QT might commence. Even though the dots projected 3 hikes for 2022, the updated rate trajectory only showed 1 additional hike over the forecast horizon, which combined with a lower terminal rate was less hawkish than some had feared. Nonetheless, the meeting marked a material hawkish shift from the Fed, putting it on par with the likes of the RBNZ. The meeting minutes also revealed that the QT discussion saw majority of members thinking it appropriate to start QT soon after rate lift off and another more hawkish tilt than expected from the Fed. 2. Global Risk Outlook The growth & inflation outlook for the US and the globe will be key for the USD. The USD is often inversely correlated to global growth & inflation , doing bad during reflationary environments (growth and inflation accelerating), while the USD usually does well in disinflationary environments (growth and inflation decelerating). Thus, with expectations that both growth and inflation will decelerate this year, both in the US and the globe, that should be a positive input for the USD in the med-term . However, incoming data will also be important to see how the Fed responds to it, where a worsening outlook that deteriorates much faster than expected could see a dovish pivot from the Fed which could mean downside for the USD if money markets start pricing out hikes (especially with markets now expected just over 4 hikes for 2022). 3. CFTC Analysis Latest CFTC data showed a positioning change of -1458 with a net non-commercial position of +36434. The shortterm unwinding of stretched USD longs played out exactly as expected but was also short-lived in the midst of the recent strong risk off moves in certain parts of the market. Surprisingly, the big flush lower in the USD has not showed up in the CFTC data as expected with very little change to the overall positioning. In the current context, the stretched long positioning makes the USD vulnerable in the event that the Fed does not deliver the very hawkish tone expected of them in this week’s upcoming FOMC meeting. 4. The Week Ahead For the USD the big focus this week will be overall risk sentiment and the first FOMC meeting for 2022 on Wednesday, followed by Friday’s Core PCE and Employment Cost index prints. The latter will of course be important given the inflation outlook with more emphasis recently on the odds of a possible wage spiral affect. However, the main event will be the FOMC, where the meeting is expected to serve as a signalling meeting to pave the way for a 25bsp hike in March and to provide more clarity on the bank’s balance sheet plans. With a March hike sitting close to a 90% probability, and markets already fully pricing in 4 hikes this year, the bar has been set quite high for a hawkish surprise. However, there are also some participants that think the recent econ data ( CPI YY >7% and Unemployment <4%) justifies an early end to the Fed’s QE program instead of allowing tapering to run it’s planned course until March. That would certainly give a more hawkish feel to the meeting and could see markets pricing in an even earlier and faster pace of QT if confirmed. But, if the Fed does not deliver on an early end to QE , and does not offer a strong enough signal that the 4 hikes priced by the market is justified, we could be in store for some moderation in the rise in yields and the USD and could also prove to be supportive for equities which ended last week in quite bad shape.
by thunderpips
11
Today’s Notable Sentiment ShiftsAUD – The Australian dollar got a much-needed lift on Thursday after a resoundingly strong set of jobs data reinforced market wagers on an early rise in interest rates, keeping short-term bond yields up at three-month highs. Following the report, Capital Economics noted that “the upshot is that the labour market is now at its tightest in years, and the continued rise in job vacancies suggests it is set to tighten further in the months ahead.” Consequently, Capital Economics expect the RBA to cease it’s A$4 billion per week bond purchase programme as soon as its February meeting.
by thunderpips
4
AUD CAD - FUNDAMENTAL DRIVERSAUD FUNDAMENTAL BIAS: NEUTRAL 1. Monetary Policy In Dec the RBA kept rates at 0.10% and weekly bond purchases at A$4bln until mid-Feb, as expected. They reiterated their commitment to maintain highly supportive monetary conditions and won’t raise rates until actual inflation is sustainably within their 2%-3% target range. They noted that the economy is recovering from the Delta slowdown and is expected to return to pre-Delta path in 1H22. The positive take from the meeting was that the RBA did not think Omicron will derail the expected recovery and sounded more optimistic than markets anticipated. They also said they will consider the future of their QE program at the Feb meeting and outlined their criteria for that which includes actions of other central banks, bond market functioning and actual and expected progress towards the goals of full employment and inflation consistent with their target. All in all, the bank still had a dovish stance but was more optimistic about the economy than expected. Furthermore, out of the 3 criteria set by the bank, the first two is arguably a green light already, which means the only thing we are waiting for is incoming employment and inflation data to see whether it’s good enough to stop QE. 2. Idiosyncratic Drivers & Intermarket Analysis There are 4 key drivers we’re watching for Australia’s med-term outlook: The virus situation – so far, the RBA has been positive about a post-Delta recovery, but incoming employment and inflation data will be crucial to see whether that optimism is justified. China – Even though the PBoC has finally stepped up with new stimulus & some fiscal support is expected in 1H22, the Covid-Zero policy in China does pose a risk to their expected 2022 recovery so the recent rapid rise in cases is one to watch. Politically, the AUKUS defence pact could see possible retaliation from China against Australian goods and is always something to keep on the radar. Commodities – Iron Ore, (24% of exports) and Coal prices (18% of exports) are important for terms of trade, and with both pushing higher on PBoC easing, that is a positive for the AUD as long as they maintain their recent push higher. Global growth – as a risk proxy, the global economy is an important consideration for AUD, which means the expected slowdown in growth and inflation globally is an important point to consider, but if China can put in a solid year that should limit the fall out if the global economy slows faster than expected. 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 Latest CFTC data showed positioning change of -2120 with a net non-commercial position of -91486. As outsized net-shorts are usually seen as a contrarian indicator we want to be mindful of potential squeezes higher for the AUD, which also means that the AUD is most likely going to be more sensitive to positive data compared to negative data because a lot of the bad news associated with the currency has arguably been priced in. The recent downside in equities have seen an additional increase in AUD net-shorts with the positioning hitting a new record low which means the risk to reward of chasing the AUD lower from here isn’t very attractive. 5. The Week Ahead The most important data point for the AUD in the week ahead is the upcoming employment data scheduled for Thursday. Recall that the RBA gave us three criteria they will be watching to determine the future of their asset purchase program, and with 2 of those 3 criteria arguable already confirmed, the only thing left is the economic data. Market consensus is looking for a much lower number in Dec (43.3K) compared to the massive surprise beat in Nov (366K) and expect the Unemployment Rate to drop to 4.5% from the prior of 4.6%. A solid beat in the data should see markets pricing in a higher probability that the RBA announces an end to their QE program at the Feb meeting and could see some of that very stretched net-short positioning seeing a bigger unwind. Alternatively, money markets have been very aggressive in their policy expectations for the RBA with 4 hikes priced by the end of the year, which means a much bigger than expected miss could see some of that pushed out to 2023 as a delayed end of QE means less optionality for the RBA later in the year. CAD FUNDAMENTAL BIAS: NEUTRAL 1. Monetary Policy In Dec the BoC left rates at 0.25% as expected and maintained forward guidance where it expects rates at current levels until the middle quarters of 2022. This disappointed some participants who were looking for the bank to announce that the output gap could be closed in 1Q22. On inflation , even though the bank still thinks it will ease from 2H22, they did drop ‘temporary’ when referring to price pressures, similar to the Fed’s removing the word ‘transitory’. The bank took a slightly bleaker view on growth, pointing to both the new Omicron variant and flooding in British Columbia as possibly drags on growth and something that could elevate supply chain issues. What disappointed markets a bit was that the bank said none of the recent developments warrants any further adjustments to normalization, which disappointed the bulls looking for a possible hawkish tilt. The bank noted that employment is back to pre-covid levels, and economic momentum in Q4 were solid, but the overall tone wasn’t enough to convince markets of a Jan hike at that time, but markets have since then continued to ramp up hike bets with money markets pricing in a >70% chance of a hike at the Jan meeting and pricing in close to 6 hikes for 2022. Keep in mind that the bank was already concerned about growth before the recent Omicron restrictions, which means the likelihood of them brining forward output gap projections seems unlikely and for that reason we think is setting up for a disappointment and possible repricing lower in money market expectations in the upcoming meetings. 2. Intermarket Analysis Considerations Oil’s massive post-covid recovery has been impressive, driven by three drivers: supply & demand (OPEC’s production cuts); improving global economic outlook and improving oil demand outlook, even though slightly pushed back by Delta concerns; higher for longer than expected inflation . Even though Oil has recovered a lot of its recent downside and have proven our caution wrong, we are still cautious going into the first two quarters. The drivers keeping us cautious is expectations of a more hawkish Fed, slowing growth and inflation , lower inflation expectations (due to the Fed) and a possible supply surplus in 1Q22. If our concerns do materialize into downside for oil prices it should put pressure on the CAD. There have however been shortterm drivers supporting Oil prices and has kept the CAD more supported than we would have expected. 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 Latest CFTC data showed a positioning change of +3649 with a net non-commercial position of -7376. Recent price action has seen the CAD take a very similar path compared to April and Oct 2021 where markets were way too aggressive to price in upside for the CAD only to see majority of it unwind. We think the CAD is setting up for a similar disappointment with money markets way too aggressive on rate expectations for 2022.
by thunderpips
10
AUDNZD: Consolidation & Complete Indecision 🇦🇺🇳🇿 For the 4 consequent weeks, AUDNZD is consolidating. The pair is coiling within a horizontal trading range. From a current perspective I see two potential scenarios: In case of a bullish breakout of the range (candle close above 1.0645 - 1.0668) a bullish continuation to 1.073 level will be expected. In case of a bearish breakout of the range (candle close below 1.0566 - 1.059) a bearish move to 1.057 level will be expected. And while the market is staying within the boundaries of the range you either wait for a breakout or buy/sell its support/resistance. ❤️Please, support this idea with like and comment!❤️
Long
by VasilyTrader
12
AUDJPY: Bullish Breakout & Continuation 🇦🇺🇯🇵 Hey traders, From the beginning of the year, AUDJPY was quite bearish. The price was steadily falling within a wedge pattern. This week a strong horizontal demand zone was reached. The price bounced nicely from that and broke a resistance line of the wedge. Now the price will go higher. Goals: 83.75 / 82.4 If you missed the entry consider an occasional retest. ❤️Please, support this idea with like and comment!❤️
Long
by VasilyTrader
8
EURAUD: Update & Your Trading Plan 🇪🇺🇦🇺 A couple of days ago EURAUD retested a broken major trend line on a daily time frame. Watching how the price reacted to that on intraday time frames I spotted a head & shoulders pattern on 4H time frame. To short wisely we need to wait for a bearish breakout of 1.572 - 1.575 horizontal neckline. Then sell the market aggressively or on a retest. Initial target will be 1.559 In case of a new higher high higher close on 4h, the setup will be invalid. ❤️Please, support this idea with like and comment!❤️
Short
by VasilyTrader
11