Boris and Kathy's FX Blog www.bktraderfx.com
11/06/2006
Today's Email Alerts:
Alert # 2 AUD/NZD Another Push to the Upside
After breaking out of a massive triangle formation, AUD/NZD has already retraced to the top of the triangle and is bouncing from there. In fact, if you look closely, the AUD/NZD "retracement" lasted for basically 7 trading days.
The Reserve Bank of Australia is set to raise interest rates this week, which should be positive for the Australian dollar. New Zealand only has the unemployment rate due for release this week and the market is forecasting a weaker print. As such, we think that AUD/NZD may have more room to extend.
However the risk is larger and the spread greater in AUD/NZD, so in this case, we are only going in with one lot. More specifically, we are buying AUD/NZD here at 1.1550 with a 1.1500 stop and a target of 1.1626.
Alert # 1 The Week Ahead
The key event risk this week in FX may not be economic but political in nature. Tomorrow's mid-term elections may well determine the direction of trade for the rest of the week and we may prefer to stand aside until we get better visibility as to how the results come in.
Conventional wisdom states that Democrats may win both the House and the Senate in which case the dollar is likely to weaken as FX markets generally dislike any change in the political climate. Yet if Republicans manage to retain the Senate – and latest polling suggests momentum may be going their way – the resulting gridlock in Washington would in fact be seen as dollar bullish. Furthermore, a full Republican win of Congress – a long shot to be sure – would be just the kind of surprise that could propel the dollar higher as continuity would be assured. In either case, order flows are likely to be muted as pairs meander back and forth until the 2006 election results begin to trickle in late tomorrow night. Stay tuned. We certainly will be.
Alert # 2 AUD/NZD Another Push to the Upside
After breaking out of a massive triangle formation, AUD/NZD has already retraced to the top of the triangle and is bouncing from there. In fact, if you look closely, the AUD/NZD "retracement" lasted for basically 7 trading days.
The Reserve Bank of Australia is set to raise interest rates this week, which should be positive for the Australian dollar. New Zealand only has the unemployment rate due for release this week and the market is forecasting a weaker print. As such, we think that AUD/NZD may have more room to extend.
However the risk is larger and the spread greater in AUD/NZD, so in this case, we are only going in with one lot. More specifically, we are buying AUD/NZD here at 1.1550 with a 1.1500 stop and a target of 1.1626.
Alert # 1 The Week Ahead
The key event risk this week in FX may not be economic but political in nature. Tomorrow's mid-term elections may well determine the direction of trade for the rest of the week and we may prefer to stand aside until we get better visibility as to how the results come in.
Conventional wisdom states that Democrats may win both the House and the Senate in which case the dollar is likely to weaken as FX markets generally dislike any change in the political climate. Yet if Republicans manage to retain the Senate – and latest polling suggests momentum may be going their way – the resulting gridlock in Washington would in fact be seen as dollar bullish. Furthermore, a full Republican win of Congress – a long shot to be sure – would be just the kind of surprise that could propel the dollar higher as continuity would be assured. In either case, order flows are likely to be muted as pairs meander back and forth until the 2006 election results begin to trickle in late tomorrow night. Stay tuned. We certainly will be.
posted by BKTrader # 11/06/2006 06:29:00 PM 
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