Apr 6, 2010

Forex Crunch AUD/USD Advances on Fifth Rate Hike

Forex Crunch AUD/USD Advances on Fifth Rate Hike

AUD/USD Advances on Fifth Rate Hike

Posted: 05 Apr 2010 09:55 PM PDT


There were many doubts about this move. When it did happen, the Australian dollar reacted with a leap. The Aussie is now better positioned towards the next big release this week and could go over the top. Update on this strong currency.

After last week’s disappointing Australian figures, there were doubts about this move. It seemed that the Australian economy relaxed and there was time for another pause. But Glenn Stevens followed this hints:

The RBA raised the Australian Cash Rate from 4% to 4.25%. This is the 5th rate hike since the global crisis began. Since the first move, there was only one pause – between the third and the fourth moves.

This move sent AUD/USD from 0.9170 to 0.92, a small initial gap for starters, before advancing to 0.9230. Before the decision, the Aussie weakened on fear that the central bank will leave the rates unchanged. We will probably see more action as the London session opens for the first time after Easter.

Above 0.9190, AUD/USD is now aiming for the high of March at 0.9250. This is a stepping stone on the way to the bigger hurdle – 0.9327 – a line that was approached many times in recent months and almost always worked successfully as a resistance line.

In the one time it was broken, the Aussie reached 0.94, the 2009 high. If the Aussie bulls relax again, 0.9090 provides immediate support, followed by 0.8980.

Note that the Aussie is strong also against other currencies. EUR/AUD fell to a new all-time low – 1.4543. The pair ticked down on Euro weakness, but made the break to fresh low ground on the Australian rate decision.

Job figures ahead

On Thursday at 1:30 GMT, Australia’s job figures are released. We got a hint for that as well: the ANZ Job Advertisements, which counts the number of jobs in newspapers, showed a rise of 1.8%. This can indicate nice job gains.

Employment Change is currently expected to show a gain of 20,000 jobs. The unemployment rate will probably remain unchanged at 5.3%. We’ve seen several surprises in the job figures in the past. These are very important figures for the Aussie.

Will the job figures send the Aussie over the top?

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Forex Daily Outlook – April 6th 2010

Posted: 05 Apr 2010 01:00 PM PDT


After everyone returned from the holiday, a rate decision in Australia and the FOMC Meeting Minutes are expecting us, among other figures. Let’s see what’s awaiting us today:

Australia provides a strong start to the day. First, the ANZ Job Advertisements are expected to give an indication for the employment figures later in the week. This will shake the Aussie towards the main course:

There still is great uncertainty about the rate decision. Some think that the RBA will push through with another rate hike from 4% to 4.25% while other are certain that Glenn Stevens will pause this time. This uncertainty means high volatility.

Update: the RBA raised the rates. The Aussie is on the march.

For more on the Aussie, read the AUD/USD forecast.

Japan’s Leading Indicators will probably rise. In Switzerland, CPI is expected to rise by 0.1%, exactly like last month.

In Europe, the Sentix Investor Confidence is predicted to rise from -7.5 to -5.9, still in the negative zone. For more about the Euro, read the EUR/USD forecast and Casey Stubbs’ latest analysis.

In Britain, Construction PMI is expected to edge up from 48.5 to 48.8 points, still under the 50 point mark meaning economic contraction. Near the end of the day, Nationwide Consumer Confidence is expected to rise from 80 to 81 points, continuing the steady recovery.

For more on the Pound, read the GBP/USD forecast.

The American FOMC Meeting Minutes will reveal the talks inside the central bank regarding the rate policy, and the growing divide between Thomas Hoeing, that wants a hawkish policy and the rest of the members. This event will cause choppy trading.

That’s it for today. Happy forex trading.

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Oil, Aussie Uncertainty and the Loonie Parity in the Weekly Video Outlook

Posted: 05 Apr 2010 12:54 PM PDT


In the weekly interview on Forex TV, I spoke with Julie Sinha about technical levels of the major pairs, this week’s events and possible breakouts. Enjoy:

I put special focus on USD/CAD which is close to parity, the eventful week for the Aussie.

Want to see what other traders are doing in real accounts? Check out Currensee. It’s free.

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