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ridethepig | AUD Market Commentary 2020.05.26On the commodity currency front, looking for risk markets to reject the move quickly this week and trigger the flows towards USD. I recommended standing aside last week, and here I have been actively adding full sized AUDUSD shorts in the 0.660x handle. The healthy cleanse of USD longs in the antipodeans will make things a lot easier to trade with the next leg lower in S&P (see chart of the day below). It will immediately be clear once equities turn and the 'V' crowd are flanked that everything was not as it seemed. Sellers have to make an attacking move at the highs and defend the possible occupancy from buyers in the jurisdiction. A sustained break in AUDUSD through the 0.665x highs will remove any cover provided from the RBA panic cut. On the other side, remember we are tracking the 2's 5's curve which is signalling loudly that we are not out of the woods! This is a brutal squeeze for USD longs, a lot of pressure applied but we are reaching boiling point. Such a wilderness will not transform into a full bloomed garden despite how politicians sell it...
Short
by ridethepig
2
Long AUD/NZD, targeting 1.1000Recent developments A dovish RBNZ policy announcement has been conducive to the pair's push to a six-month high. Further monetary policy of asset purchases over negative rates was largely expected. Technical analysis The pair has given back a bit since rallying at its fastest pace since 2014 (around 7% increase in just over a month). If it can break past previous 1.0850 key level, then there should be a chance to test 1.10 or at the very least trade up the channel with ease. Primary drivers for a further move up On the fundamental side, elevated risk sentiment on the backdrop of bottoming growth in markets, as well as the continued divergence between RBA and RBNZ should support the upward direction of the pair. Policymakers have remained quite dovish, which should be risk-positive as central banks have incentive to ease rather than tighten. With that being said, the RBNZ policy stance is looking more dovish than the RBA's. We can look at both policy stances and yield curves for an indication of what's to potentially come. The RBNZ have kept the official cash rate at 25 bp, while the base of asset purchasing have been expanded to a cap of NZ$60bn. Although the market seems to be pricing in negative rates, I don't think it's likely that we will see that, given that the RBNZ effectively guided that it won't happen (at least for this year - although this could be on the cards for 2021). Why lose all credibility on forward guidance when there are other methods of easing such as bond purchasing or fixed term loans? Either way, the base case is further easing and I would look towards August and June meetings as further catalysts if financial conditions tighten. On the contrary, the RBA has stopped purchasing bonds since early May after hitting 25 bp on the 3Y; keeping the curve at the current levels should be supportive to Australia, which remains a relatively high yielding Aaa country (despite slight rating downgrade). Risks Downside risk on AUD/NZD lie in 1) narrowing policy differentials, 2) risk sentiment softening, 3) and/or a more hawkish RBNZ that would lead to NZD strength, thus pushing the pair lower. As such, targeting top end of the channel 1.1000 with a stop of 1.05985.
Long
by Miloslaw
6
ridethepig | The Elements of AUDJPYBuyers made the completion of an ABC corrective sequence to end the move with today's NY session. Europe are now leaving their desks with defensive superiority at the 70.2x highs. Next comes a test of the lows as the next customary inventiveness of swings across risk markets enters into play. The promises of a vaccine any time soon sadly look like unicorns, politicians will do anything to sell the re-open. After the preparatory manoeuvres complete at 0.650x, AUD sellers are keeping an eye on the weak fundamentals. Covid delivered massive blow to Australia, and with little immunity on the health front further pockets of lockdowns look a matter of when rather than if. Now the RBA is a bridge builder, although PBOC are in retreat and sheltering until the storm passes. It means the "Giant Panda" will no longer be on the AUD bid for the next few Months, and Quarters. AUD is surrendering the 70 handle with the close of shop today. Why? Well, because once the bid expires without breaking the barriers ahead, the lust to expand which was missing until then, is well and truly gone now. Early buyers cutting their longs into resistance, and macro players happy to park in JPY in this environment to prevent any breakup. Reassessment in the bearish view will be required above 70.2x as the nature of the move will be considered impulsive. For now expecting it to wend its wearisome way back towards the lows. It will be interesting to see how buyers flee for the close.
Short
by ridethepig
3
ridethepig | AUD Market Commentary 2020.05.12A normal move, but one which has a deeper meaning after the Chinese ban on Australian beef. Here tracking closely 0.650x resistance to mark another important high here. It is a clearly loud signal on the foreign policy side of their relationship considerably weakening, the Giant Panda (PBOC) who was once always on the AUD bid has taken cover. While Australia may be better positioned than many in terms of case numbers, it is in no way advisable to emphasise this too much. We are still tracking the same forecasts set out last month: " Inline Case - US and Europe opening in July with clear preparations for further rounds of social distancing programs that will come into play again at year-end through Q1 2021 as the virus migrates back in the Winter months. Opens up another calculated leg down in risk markets to sweep the current floor in place and early buyers It looks like we are set for a re-opening this summer and for schools in the West to go back in September. We will keep a close eye together on whether the inflows dry up, and will it be for long? We'll see. For now keeping a defensive stance, when equities roll over we will have a clearly defined swing and range in play for the rest of 2020. " Remember any hell-bent strategy on buying AUD, without taking into consideration the risks around the fallout of the West with China and their own domestic relationship will end badly. Protectionism, like a garden of weeds, will continue to force globalisation into retreat and wreak havoc! On the technical side, 0.650x is strong resistance and with US Equities S&P sitting under the 3,000 level we have all the 'green lights' for a second selloff in risk markets. I am actively adding AUDUSD shorts at 0.650x with stops above the double top at 0.660x.
Short
by ridethepig
6
AUDCAD 050520 PREPARATION FOR RBAOANDA:AUDCAD Like our FB page: PROCHARTLER INTERNATIONAL Leave your comments below. Disclaimer: These are only an idea or a point of view of what will happen in the market. Please do your own analysis and do not copy blindly. I will not be responsible for any losses if you follow the idea. These ideas are meant for sharing and learning. Please manage your risk-reward accordingly. You are allowed at any moment to leave any comments below as those comments will be taken as a learning point or reviews. Trade at your own risk and good luck. Regards: ProChartler
Short
by Pro_Chartler
1
GBPAUD Long CHINA DEVALUE CORRELATIONA trade I picked up tonight. Fundamental: -AUD to weaken from CNY weakness as they fail to make 880bln in loans -economic performance expected to decline as outlined by Lowe Technicals: -strong rejection off end of daily range -supports built at swing low, first candle (1st arrow) Sentiment: -AUD overextended but GBP also weak -maybe if gold continues down AUD will follow Price action: -buyers from the initial rejection find value in the market and further purchase at support and a liquidity area (2nd arrow)
Long
by madebyforex
ridethepig | AUD Market Commentary 2020.04.08After sweeping the highs, which was not so difficult with its positional issues, this leg should appear all too easy. Well this may lead you to ask some important questions around how a pinned high can be called into question so confidently, because it is possible to build one' whole swing around resistance/support, but around a pinned high? This requires an advanced understanding of liquidity. Of course, sweeps normally occur in the ebb and flow of risk and strategic positioning, perhaps when we are pursuing a fleeing price driver. On the other side, a well planned architect can be the basis which influences the way we construct the whole predicted flow of capital. Here it must be pointed out that the highs will not last forever, a pivot which only crops up occasionally, in fact even the threat of such important at 0.620x barrier can force our opponent into capitulation and thus its effect carries significant importance. So, the following swing merits our special interest in AUDUSD as long as AUDCNH remains under pressure. It is about a sweep which suddenly appeared, then just as suddenly disappeared. Some hours from now, the move will be clear. Instead of the fleeting adventure forward with investors thinking everything is roses and we are back to normal, the G10 FX board will be dominated by a lasting positional advantage to risk-off. Until things have settled down and peace reigns, the USD will remain king. Thanks as usual for keeping the support coming with likes, comments, charts and etc!
Short
by ridethepig
ridethepig | NZD Market Commentary 2020.03.19Divergence in AUD and NZD beginning to widen as large hands dump AUD and pile into NZD. Cases are relatively low in NZ which will keep the RBNZ from going negative, watch-out for AUDNZD breaking parity in the coming sessions. The analysis of the starting position shows us the slingshot is ready to conduct a flanking manoeuvre, but also a quick-witted seller: the exhaustion leg we are tracking can save it from the worst. As long as the 0.49xx lows are in focus, the slingshot can be administered. In this case, the breakdown is coming from Chinese inflows taking a walk, who have been suddenly threatened like a deer in the headlights; (1) AUDCNH (2) NZDCNH After the flash crash the board has been cleared and the lows are naked for sellers to deliver the fatal blow. Instead of a breakdown, we should look to fade these lows. What it means is we have all the ingredients in the pot for a huge rally once we clear the coronavirus flows; so what we need to track market-wise are two 🔑 components: 1️⃣ French & Italian numbers declining 2️⃣ Focus shifting from fatalities to recoveries Remember in terms of markets we are trading perception. This expectation of panic looks set to continue till month-end, I am no expert in virology but from talking to some Chief Exec’s at hospitals on the ground there is a sense that virologists have created something sensational here which is opening the door to overreaction and hype from governments and unlocking (btw in all the wrong places) doors they never thought were possible on both the fiscal and monetary side. Stress in funding markets continues, as long as this remains the case then USD will stay in strong demand until the storm passes, as capital rushes to the doors. AUDUSD - Macro Updates via Coronavirus Impact SHCOMP - Chinese Equities Whatever may be the case, this game is beautiful, as beautiful as it gets. There is a battle of major flows underway, USD will remain bid till we can clear these dark clouds of corona-panic. Or, to put more simply, returning to the starting position creates an easier flow TA-wise that will give buyers an opportunity to grab tempo. As usual thanks for keeping the likes, comments and etc coming....What interesting times we are in!
Short
by ridethepig
5
ridethepig | AUD Market Commentary 2020.02.26AUD and NZD suffered another session of heavy selling and marked fresh lows - the move was mostly algo driven to run stops and help clean the map for dividend season. Happy to sit short and look to add from higher levels. The USD demand remains supported but given that it we are approaching dividend season, remember, there will be strong local AUD demand inside this 0.65xx handle. If you are not already holding shorts from above then look to sell future rallies into 0.665x. The medium term swing we are tracking: A rather wild week on the technical side after a significant break through the 0.670x support, this is unlocking a test of 0.645x RBA floor via rate differential. This move looks particularly vulnerable considering where we are with Copper and Iron ore: Retail have loaded the boat on the sell side and it is beginning to look very crowded from a positioning perspective. The local AUD export demand will squeeze these soft hands to eventually capitulate with a breakout campaign before resuming the leg lower to cause maximum pain! Thanks as usual for keeping the support coming with likes, comments, charts and etc!!
Long
by ridethepig
1
AUDUSD Potential Short Term Retracement or Mid Term Swing Most of the wise traders knew that the 25bp rate cut probabilities were higher and then finally when the actual day came up it ended up being a cut actually. I don't wanna explain all those stuff which had already been past but for now, we can see good demand in Aussie just to know that fed might have some future rate stimulus probabilities (but that part on next time). Knowing how the fall on S&P/ASX 200 a couple of days last week due to covid-19 chaos then suddenly after today's RBA rate decision gave a sweet upward pump which creates some optimistic vibe over Australia equity market and I assume with lower Official cash rate might have something to do on it. I wonder if S&P/ASX 200 bounces back for a couple of days it will pinpoint the demand in Aussie as people need local currency to even purchase the equities babe! Already a cut from RBA means a delay in any further cuts even if there is anything left to do! Which let me think FED babe in turn to have some stimulus game!
Long
by Anatta0
ridethepig | Flash Crash In Play For AUDCNH !!A major breakdown ahead of the open as markets catch up to the virus disruptions. AUD and global trade are set to suffer for sometime, it will take a brave man to step against this flow. On the monetary side, RBA tee'd up a rate cut in April with another in Q3 on the cards. Housing has already done the heavy lifting, will need A LOT more help from elsewhere to create a positive outlook in the near-term for AUD. PBOC in a 'whatever it takes' moment with the printer starting to overheat. On the technicals, the doldrum 4.7-4.9 range remained intact throughout 2019. Since the new decade we have broken the lower end in the range via coronavirus trigger, a screaming warning for what is cooking globally. We are sitting at key support 4.5 which needs to hold otherwise we have a flash crash in play towards 4.3 - 4.25. Unless buyers step in quickly we are set to lose support on panic. Continue to sell weakness if we lose support. For those tracking USDCNH : For those tracking EURCNH : Lastly, for those tracking Chinese Equities : Best of luck all those in CNH, risks come from further PBOC intervention although looks like they ran out of time! Thanks all for keeping the likes, comments and charts coming!
Short
by ridethepig
1
RBA Monetary Policy Meeting. AUDNZD bear domination?!RBA is less likely to provide further support to the Aussie dollar and expect any AUD weakness to be mostly channeled through a lower AUD/NZD, where the monetary policy differential may be more evident (given a neutral RBNZ). Market participants in this cross-currency seem to price in ahead of the meeting where we can see a strong bearish pressure for now in the price action for this cross. We have a key level 1.03753 which acted as support in the past and this level has good weigh as it lines up with weekly pivot point s3 and descending channel lower trendline (acts as supports). Break lower through this key level with good bearish momentum should signal us price can dive more near the major support 1.03131 or even further depending on the outlook reaction after the meeting. If RBA ends up neutral or surprise hike bearish may lose its momentum strength.
Short
by Anatta0
1
ridethepig | AUD Macro Updates Via Coronavirus ImpactOn the macro chart we are still chopping around the same lows that will mark the ending of a currency cycle alongside a turn in commodities. The coronavirus expectation and impact legs are short-circuiting the reflationary trade that markets were so eager to jump on board with towards the back-end of 2019. Sadly numbers outside of China keep growing and economic impact is entering under the spotlight. As long as things do not improve on the virus front we are going to see a major flush down in AUD and continuation of the same USD bid. Tracking closely the open today, smells like Tokyo are going to ring the risk alarms. A rather wild week on the technical side after a significant break through the 0.670x support, this is unlocking a test of 0.645x RBA floor via rate differential. This move looks particularly vulnerable considering where we are with Copper and Iron ore: Good luck all those in AUD or looking to add positions. Actively looking to add shorts on any spikes into 0.670x or even front running with 0.668x, a waterfall breakdown is in play until we will see some local exporter buying interest which is initially found at 0.645x and 0.632x.
Short
by ridethepig
ridethepig | AUDNZD Breaking Higher !!A superb time to update the AUDNZD chart after a fresh technical breakup yesterday. The Q4 prints from antipodeans is very positive and actually triggering a slightly hawkish tilt by the RBA. Despite the brutal domestic story in Australia with bushfires and coronavirus spillovers, Scott Morrison has done the heavy lifting via housing policies. There is a lot of AUD shorts to be unwound by leveraged retailers creating a massive upside in AUDNZD with a supportive price driver. The hawkish shift by RBA is subtle and not visible by the naked eye, there is not a single mention of coronavirus spillover effects on growth and if anything emphasis on just how temporary the impacts are. For the technical picture things are a lot clearer in the medium term (see diagram below): This is clearly rallying towards the 1.07-1.08 area as the bottom is defined and established. For the short-term the picture is a little more complex (as we have RBNZ on the wires this week), the double bottom set-up in play will imply a minimum flow towards 1.065x. Don't forget to keep the likes and comments rolling in!
Long
by ridethepig
2
AUDJPY Market OverviewIt looks like a successful break-and-retest. AUD/JPY found resistance at the former support level around 74.25 and is resuming its slide to the next downside targets. The 38.2% Fibonacci extension level appears to be holding as support at the moment, but stochastic has room to move lower before reflecting exhaustion among sellers. Bearish pressure could still take the pair down to the next support areas, possibly around the 50% Fib that lines up with the swing low and around s1-s2 of the weekly pivot. Worst case for Aussie bulls should lead the price lower dip extension at 78.60% which line up with the s3. Another speech by RBA Governor Lowe is coming up soon, and negative remarks could hurt the Aussie, especially if risk appetite stays lows.
by Anatta0