AUD / USD - SHORT for the moment. Looking @ 69.8 Support area.
The AUSSIE has been pounded since FEB this year in this downward channel. Fears of a housing bubble coupled with the uncertainty that the royal commission brings the four big banks has shaken the courage people have in the currency. Banks have raised rates yet the RBA does not see a rake hike anytime soon, 1.5% remains the cash rate. Australia is also in the middle of the trade war between the US and China, this cheaper AUSSIE dollar has boosted exports to almost a record high in the latest figures, China remains Australia's largest trade partner and it is china who is benefiting the most from this weaker AUSSIE. This cheaper dollar will help speed up the Australian economy.
The good news is a change might be on the horizon but the target for now remains the 69.9 support area.
The COT report shows stretched numbers with large speculators short, commercials long and small speculators overwhelmingly holding short positions. This widening might be at it's limits and next weeks COT report will give us really good insight to what large volume traders are going to do. The latest report shows uncertainty both long and shorts being pulled, but i favor the downside for the moment.
The DXY has seen a rally the past week in it's battle against the euro, the hawkish talk from the federal reserve has boosted the US dollar on the good employment numbers and what looks to be a strong economy on paper, US equities are at record highs and treasury yields also elevated, bonds struggling to find a bid. Is there a correction coming soon or will we continue higher, October is known for it's market corrections and if this DXY keeping going higher there is danger that something, somewhere in the emerging markets will break and that is bad news, a weaker dollar might be more healthy for everybody.
The VIX spiked upto 17 then fell back down to 14 which shows traders are watching things closely, if there is some risk off the AUD might find some strength and the COT report will start to reverse into a bullish trend.
The good news is a change might be on the horizon but the target for now remains the 69.9 support area.
The COT report shows stretched numbers with large speculators short, commercials long and small speculators overwhelmingly holding short positions. This widening might be at it's limits and next weeks COT report will give us really good insight to what large volume traders are going to do. The latest report shows uncertainty both long and shorts being pulled, but i favor the downside for the moment.
The DXY has seen a rally the past week in it's battle against the euro, the hawkish talk from the federal reserve has boosted the US dollar on the good employment numbers and what looks to be a strong economy on paper, US equities are at record highs and treasury yields also elevated, bonds struggling to find a bid. Is there a correction coming soon or will we continue higher, October is known for it's market corrections and if this DXY keeping going higher there is danger that something, somewhere in the emerging markets will break and that is bad news, a weaker dollar might be more healthy for everybody.
The VIX spiked upto 17 then fell back down to 14 which shows traders are watching things closely, if there is some risk off the AUD might find some strength and the COT report will start to reverse into a bullish trend.
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COT REPORT - Breakdown here - imgur.com/XYMhRvt
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AUSTRALIAN DOLLAR - CHICAGO MERCANTILE EXCHANGE Code-232741
FUTURES ONLY POSITIONS AS OF 10/09/18 |
--------------------------------------------------------------| NONREPORTABLE
NON-COMMERCIAL | COMMERCIAL | TOTAL | POSITIONS
--------------------------|-----------------|-----------------|-----------------
LONG | SHORT |SPREADS | LONG | SHORT | LONG | SHORT | LONG | SHORT
--------------------------------------------------------------------------------
(CONTRACTS OF AUD 100,000) OPEN INTEREST: 170,758
COMMITMENTS
25,596 98,880 2,095 118,989 25,120 146,680 126,095 24,078 44,663
CHANGES FROM 10/02/18 (CHANGE IN OPEN INTEREST: 16,087)
5,126 6,692 212 6,652 3,030 11,990 9,934 4,097 6,153
Large speculators have added more shorts on the AUD this week but the price has been moving up suggesting this rise is a small correction in the downward trend.
Keep watching that 69 mark, could be a good buy.
FUTURES ONLY POSITIONS AS OF 10/09/18 |
--------------------------------------------------------------| NONREPORTABLE
NON-COMMERCIAL | COMMERCIAL | TOTAL | POSITIONS
--------------------------|-----------------|-----------------|-----------------
LONG | SHORT |SPREADS | LONG | SHORT | LONG | SHORT | LONG | SHORT
--------------------------------------------------------------------------------
(CONTRACTS OF AUD 100,000) OPEN INTEREST: 170,758
COMMITMENTS
25,596 98,880 2,095 118,989 25,120 146,680 126,095 24,078 44,663
CHANGES FROM 10/02/18 (CHANGE IN OPEN INTEREST: 16,087)
5,126 6,692 212 6,652 3,030 11,990 9,934 4,097 6,153
Large speculators have added more shorts on the AUD this week but the price has been moving up suggesting this rise is a small correction in the downward trend.
Keep watching that 69 mark, could be a good buy.
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Current COT REPORT - Breakdown here - i.imgur.com/wZXEH1F.png
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