Tuesday June 1, 2010 - 14:58:29 GMT
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Black Swan Capital - www.blackswantrading.com
RBA Gets It Started; Dollar Correction FinishesKey News
- Chinese Monetary Official: Housing Risk Greater Than in US, UK Pre-Crisis (Naked Capitalism)
- Fears Rise in Europe Over Potential for Deflation (New York Times)
- China Real Estate Bubble Bursts in Bond Market: Credit Markets (Bloomberg Businessweek)
â€śStudy carefully, the character of the one you recommend, lest their misconduct bring you shame.â€ť â€”Marcus Tullius Cicero FX Trading â€“ RBA Gets It Started
What did the RBA do? Nothing.
And their inaction confirmed what traders have been anticipating: a very unstable foundation for the global economy. Thus, despite the outlook for Australiaâ€™s economy in the long-run, itâ€™s certainly no time to be raising interest rates any higher.
So after a very quiet memorial day in the FX market, the Australian dollar, naturally, is reacting most sharply to the RBAâ€™s assessment of global economic conditions. And the euro isnâ€™t doing so hot either.
4-Hour AUDUSD & EURUSD: correction over? [Chart not available in text format.]
The euro has already touched fresh lows on its test of critical support levels; the Aussie is quickly erasing last weekâ€™s rise today.
And hereâ€™s another chart to pick through. It shows 1) the US Dollar Index futures, 2) the non-commercial long positioning on US Dollar Index Futures, and 3) the month-over-month change on US dollar Index Futures non-commercial long positions.
Thereâ€™s been quite a steep drop-off in total non-commercial longs since the beginning of the year, but based on the long positioning action, it seems a lot of the speculative excess has worked itself out. In other words, there are plenty of buyers right now who will be looking to jump back in on the dollar as global worries provide additional fuel for the risk aversion trade.
[Chart not available in text format.]
Weâ€™d been shuffling around our positions last week and the week prior, expecting a dollar correction. We mostly got it. And based on price action alone, the buck could have easily fallen back further. But the above analysis tells us that this correction could easily be over already.
John Ross Crooks III
Black Swan Capital
www.blackswantrading.com Have you heard about PositionTrader FX?
Weâ€™ve been getting the same question a lot over the last few days: is it too late to profit from the euro crash; and what about the Aussie ... or yen?
And our answer is:
Weâ€™ve done well in 2010. And we expect to do even better as the halfway point approaches.
For good measure, Iâ€™ve included our year-to-date track record and profit curve here, reflecting through Thursday, May 20.
Hereâ€™s the bottom lineâ€¦
We think the Euro is going to par with the dollar â€“ 1:1 â€“ or maybe even lower.
If youâ€™ve been waiting on the sidelines, now is time to jump in.
If youâ€™re not sure how to implement a currency trading strategy, weâ€™ve got you covered. And we offer a 30-day 100% money-back guarantee if this isnâ€™t for you. After that we prorate your refund on a weekly basis if itâ€™s not working for you.
This is speculative trading and is not for everybody. If youâ€™re cut out for this, jump over now and give it a try.
All the best,
Director of Sales and Marketing
Black Swan Capital
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