Price & Time: Just How Important Was Last Week Low in AUD/USD?
We have been rather dismissive of the recent low in AUD/USD as a few
cyclical techniques continue to point lower in the rate. However, a
variety of longer-term Fibonacci time relationships between this month’s
low and several key lows over the past 4 years is making us seriously
question this negative cyclical assessment. Such a clear relationship
amongst so many important lows is rare and raises the possibility that
this month’s low could lead to a deeper upside correction (and possibly
even a full fledge reversal in trend) in the weeks ahead. The .9300
level looks absolutely critical in this regard with a close over it the
likely lynchpin to a much more important move higher. Shorter-term
cyclical studies suggest weakness will be seen in the Aussie into the
latter part of the week before another low of some kind is recorded.
However, a close below .8900 would undermine the potential positive
prospects of the Fibonacci time relationship.
If actual > forecast = good for currency (for USD in our case)
U.S. Retail Sales Show Continued Growth Despite Pullback In Auto Sales
Retail sales in the U.S. rose for the fourth consecutive month in
July, according to a report released by the Commerce Department on
Tuesday, although the sales growth was slightly weaker than expected due
to a notable drop in auto sales.
The report said retail sales edged up by 0.2 percent in July following an upwardly revised 0.6 percent increase in June.
had expected sales to rise by 0.3 percent compared to the 0.4 percent
increase originally reported for the previous month.
New Zealand Producer Price Output +1.0% In Q2
Producer prices received in New Zealand for the output of products
jumped 1.0 percent in the second quarter of 2013 compared to the
previous three months, Statistics New Zealand said on Monday.
That follows the 0.8 percent quarterly gain in the previous three months.
Input prices added 0.6 percent on quarter, slowing from the 0.8 percent increase in the three months prior.
dairy prices contributed to increases in both the output and input
PPI," prices manager Chris Pike said in a release accompanying the data.
2013-08-19 01:30 GMT | [AUD - New Motor Vehicle Sales]
If actual > forecast = good for currency (for AUD in our case)
Australia July New Motor Vehicle Sales -3.5%
The total number of new motor vehicle sales in Australia was down a
seasonally adjusted 3.5 percent in July compared to the previous month,
the Australian Bureau of Statistics said on Monday, standing at 93,797.
That follows the 4.0 percent monthly gain in June.
category, sales of passenger vehicles shed 3.0 percent on month, while
sports utility vehicles lost 2.3 percent and other vehicles dropped 6.2
AUD at Risk on RBA Minutes- Verbal Intervention on Tap?
Why Is This Event Important:
Although there’s speculation that the RBA delivered
its last rate cut at the August 6 meeting, Governor Glenn Stevens may
continue to strike a cautious outlook for the region amid the slowing
recovery, and the central bank head make further attempt to talk down
the Australian dollar in an effort to balance the risks surrounding the
The RBA may talk down bets for lower borrowing costs
amid the rise in private lending, and we will need to see the central
bank endorse a neutral policy stance to see a more meaningful rebound in
the Australian dollar.
Nevertheless, Governor Stevens may continue
to push for a weaker exchange rate in order to stem the downside risks
for growth and inflation, and the bearish sentiment surrounding the
higher-yielding currency may gather pace over the near to medium-term
should the interest rate outlook deteriorate further.
How To Trade This Event Risk
Should the RBA soften its dovish tone for monetary
policy and talk down bets for another rate cut, we will then need to see
a green, five-minute candle following the statement to consider a long
entry on two-lots of AUDUSD. If the market reaction favor a long
aussie-dollar trade, we will set the initial stop at the nearby swing
low or a reasonable distance from the entry, and this risk will
establish our first target. The second objective will be based on
discretion, and we will move the stop on the second lot to cost once the
first trade hits its mark in an effort to protect our profits.
On the other hand, the RBA may try to talk down the
Australian dollar amid the weakening outlook for growth and inflation,
and we will carry out the same setup for a short aussie-dollar trade as
the long position mentioned above, just in the opposite direction.
Chinese Developers Move Up as FarmVille hit 50M This Week :
a virtual farming game from Zynga, inspired by an earlier China-based
version, has reached 50 million monthly active users this past week,
having gained 4.21 million new players. Meanwhile, our AppData service shows Chinese developers gaining some of the most new users among the top 20 fastest-growing games on Facebook.
Silicon Valley and Chinese gaming platforms, companies and gamers
are, in their own ways, coming together like never before. Indeed,
number 12 on the list is 開心農場, or “Happy Farm,” made by ELEX — apparently also a Chinese-language virtual farming game patterned after earlier, China-based Happy Farm games.
My Fishbowl, a multi-language but apparently mostly Chinese-language virtual aquarium game made by AppSphere Inc,
gained 891,000 new users over the past week, to reach 4.19 million
monthly actives. It came in at number five. It was followed by Animal
Paradise, from Beijing-based Rekoo, with 726,000 new users and 2.77 million monthly actives.
Australia Westpac-MI Leading Index Points To Strong Above-Trend Growth :
A leading indicator for Australian economic activity continued to signal solid above-trend growth for the economy
in the coming months, though the annualized growth rate of the index
has eased to a seven-month low, a key survey revealed Wednesday.
Westpac and the Melbourne Institute said that the annualized growth
rate of its leading index, which indicates the likely pace of economic
activity three to nine months into the future, was 3.6 percent in June.
was the slowest annualized growth rate in the index since November
2012. However, it remained notably above its long term growth of 2.9
percent and therefore points to a strong above-trend growth outlook, the
However, the index score remained unchanged from May's reading of 293.4.
Reserve Bank of Australia recently revised down its growth forecast for
the economy in 2013 to 2.25 percent from 2.5 percent, although it has
maintained its growth forecast out to June 2014 at 2.5 percent.
The Week Ahead: A Contrary Bet For 2014 :
It was a rough week for the exchanges as the three-hour halt in Nasdaq
trading on Thursday was unprecedented. There was no comment from the
Nasdaq until well after the close. On Friday, their response also seemed
to be lacking, looks like they must be using the same damage control
experts as Carnival Cruise.Even more disturbing from my perspective was
the glitch in Goldman Sachs (GS) options software on Tuesday that
mis-priced over 800,000 options at $1 each. If the regulatory
authorities decide to bust these trades and protect Goldman, I feel it
will be very discouraging to the individual investor.I agree with Myron
Scholes, co-creator of the Black-Scholes option pricing formula, who
told the Financial Times that Goldman should pay for their mistake.The
actions of the big institutional traders and research departments can
often provide some useful insight. Sometimes, but not always, it is a
good idea to do the opposite of what they are doing or
recommending.Should you be doing the opposite of what they are
Gold price strength in Friday’s session could spill over into next week as the market’s technical charts point to further gains :
BoJ Chief Says Bond Buying Lifted Stock Prices, Restrained Bond Yields :
Bank of Japan's Governor Haruhiko Kuroda said bond buying has started to
exert effects and monetary easing does not necessarily lead to
cross-border capital outflows.