Investment Logs

FOREX: British Pound starts the week off bearish against US Dollar

CountingPips — Tue, 14 May 2013 00:33:51 +0000

By CountingPips.com

The British pound sterling has begun the week on the decline against the US dollar in foreign exchange market trading. The GBP/USD currency pair is currently trading around the 1.5300 price level after the close of the New York trading session. The pair began the week trading about 50 pips higher.

The GBP/USD dropped last week following two straight weeks of increases and closed below the 1.5500 major support resistance level. So far this week, the pair has been trading outside the weekly ascending channel (see below weekly chart) that has held for the last 10 weeks approximately.

Support & Resistance:

The GBPUSD looks to be headed to a test of the 1.5250 support level which is just 50 pips below current price. A close below this level would bring the possibility of a retest of the major 1.50 level and bring this pair close to the lowest levels of 2013.

Any rebound this week in the British pound would see overhead resistance near the 1.5360 level up to the 1.5400 round number while the major 1.5500 threshold would also be lurking above.

This week is light on fundamental data for the UK with jobless claims numbers and the Bank of England inflation report both due out on Wednesday.

GBP/USD: Last 6 Weeks of Changes & Ranges

week date	pct change	true range
2013.04.07	-0.064	0.0173
2013.04.14	-0.718	0.0169
2013.04.21	1.583	0.0302
2013.04.28	0.544	0.0139
2013.05.05	-1.352	0.0284
*2013.05.12	-0.307	0.0107

* current week

Written by Zac Storella, CountingPips Forex Blog & Currency Research

The post FOREX: British Pound starts the week off bearish against US Dollar appeared first on CountingPips Forex News & Currency Trading Blog.

Israel cuts rate 25 bps in surprise move, to start buying FX

CentralBankNews — Mon, 13 May 2013 13:50:00 +0000

Israel’s central bank cut its policy rate by 25 basis points to 1.50 percent and will intervene in the foreign exchange market where the shekel is continuing to appreciate due to the start of natural gas production, rate cuts by other central banks, continued quantitative easing in major economies and an expected moderation in global growth.
The rate cut by the Bank of Israel (BoI) was a surprise move and the bank’s Monetary Policy Committee said the decisions were reached “outside the regularly scheduled framework.” The next scheduled meeting of the committee is May 27.
The BoI said it plans to buy about $2.1 billion of foreign exchange this year to offset the impact of the improvement in Israel’s current account from drilling of natural gas in the Tamar field. Production from the field, in the Mediterranean Sea off Israel’s coast, started end-March.
At its last meeting in March, the BoI had said economic activity was continuing to improve but it was still too early to determine if the economy had turned the corner. In 2012 the BoI cut rates by 100 basis points but had left them unchanged so far this year.
In a statement, the BoI said the effective exchange rate of the shekel had appreciated by 5.4 percent in the past three months, noting the rise against the U.S. dollar and euro as this contrasted with the movement of other currencies.

“The appreciation trend was affected by, among other things, the beginning of natural gas production from the Tamar gas field, the interest rate reductions by central banks worldwide, notably the ECB, and the continued quantitative easing programs in several major economies around the world,” BoI said.
It added that global growth forecasts, particularly of Europe and China, had been revised downward and this moderation in growth is expected to affect Israel.
It also noted that inflation was below the the midpoint of the BoI’s target range and was expected to remain within the range in the coming year, while recent actions by banking supervisors were moderating the impact of the bank’s policy rate on the housing market.
Israel’s inflation rate eased to 1.3 percent in March from 1.5 percent, in the low end of the BoI’s target of 1-3 percent.
In March the BoI’s staff forecast economic growth of 2.8 percent this year and 3.3 percent next year, excluding the impact of natural gas drilling at Tamar. In 2012 Israel’s Gross Domestic Product expanded by 3.1 percent.
Including the effect of gas drilling, growth is forecast at 3.8 percent this year and 4.0 percent in 2014.
Revenue from natural gas production from the Tamar field is improving Israel’s current account and this is putting upward pressure on the shekel and threatening the competitiveness of Israel’s economy – a phenomenon known as the “Dutch disease”
The BoI’s policy committee said it had approved a plan to “offset the effect of the natural gas production on the exchange rate.”
Starting this year, the BoI would purchase foreign exchange in line with its assessment of the improvement in the current account from gas production. This is estimated to be about $2.8 billion and taking into account payments by the gas companies, the BoI said it would purchase about $2.1 billion of foreign exchange by the end of this year.
The BoI said the purchase of foreign exchange to offset natural gas production is in addition to its normal operations in the foreign exchange market. The BoI sometimes intervenes in the market when the exchange rate is “not in line with fundamental economic conditions, or when conditions in the foreign exchange market are disorderly.”

www.CentralBankNews.info

Central Bank News Link List – May 13, 2013: G7 to press on with bank reforms, Japan escapes censure

CentralBankNews — Mon, 13 May 2013 12:26:00 +0000

Here’s today’s Central Bank News’ link list, click through if you missed the previous link list. The list comprises news about central banks that is not covered by Central Bank News. The list is updated during the day with the latest developments so readers don’t miss any important news.

G7 to press on with bank reforms, Japan escapes censure (Reuters)
G-7 reaffirms pledge to avoid currency manipulation (WSJ)
Fed maps exit from stimulus (WSJ)
How Fed could increase QE, not taper it (CNBC)
Baht rises on BoT comment (Bangkok Post)
Russia: Substantial policy shift unlikely, risk of slowdown “insignificant” (dow jones)
Central banks want to hold emerging-market currencies (WSJ)
Dual-track system ‘could replace Libor rate‘ (The Telegraph)
Tombini says Brazil will do what it takes to slow inflation (Bloomberg)
Indonesia’s central bank to hold rate as govt grapples with fuel policy (Reuters)
Taiwan won’t follow SKorea policy rate cut (Reuters)
‘Shadow banking’ expands as Hong Kong brokers lend to Chinese businessmen (SCMP)
Swelling Iceland cash raises capital control risks, TM CEO says (Bloomberg)
Who are the leading Fed contenders? (WSJ)
Egypt given $3 bln Qatari deposit at 3.5 pct – official (Reuters)
Argentina, China negotiating $10B currency swap – report (WSJ)
www.C entralBankNews.info

Large FX Speculators pushed US Dollar bets to Highest Level in Almost a Year

CountingPips — Sun, 12 May 2013 17:29:23 +0000

Large Currency Speculators added to US Dollar long position for first time in 3 weeks

By CountingPips.com

The most recent weekly Commitments of Traders (COT) report, released every Friday by the Commodity Futures Trading Commission (CFTC), showed that large futures traders increased their total bullish bets of the US dollar last week to the highest level since June 2012, according to Reuters.

Non-commercial large futures traders, including hedge funds and large International Monetary Market speculators, raised their overall US dollar long position of $26.829 billion as of Tuesday May 7th. This was an increase from the total long position of $24.49 billion on April 30th, according to position calculations by Reuters that derives this total by the amount of US dollar positions against the total positions of euro, British pound, Japanese yen, Australian dollar, Canadian dollar and the Swiss franc.

Total US dollar long positions had declined slightly the previous two weeks and had fluctuated between $23.57 billion and $26.3 billion for the previous nine weeks, according to the Reuters calculations. US dollar positions turned into a bullish position on February 19th when USD bets equaled $1.481 billion after having been in an overall bearish position from November 2012 to February 2012.

What is the COT Report:

The weekly cot report summarizes the total trader positions for open contracts in the futures trading markets. The CFTC categorizes trader positions according to commercial hedgers (traders who use futures contracts for hedging as part of the business), non-commercials (large traders who speculate to realize trading profits) and nonreportable traders (usually small traders/speculators).

Individual Currencies Large Speculators Positions in Futures:

The individual currency net speculator positions last week saw advances for the Swiss franc and the Canadian dollar while the euro, British pound sterling, Japanese yen, New Zealand dollar, Australian dollar and the Mexican peso all saw a declining number of net large trader contracts for the week.

Individual Currency Charts: (Please Click on Chart to Enlarge)

EuroFX: Weekly change of -3,384

EuroFX: Large trader positions for the euro deteriorated last week after showing an improvement the previous week. Euro contracts decreased to a total net position of -33,533 contracts in the data reported for May 7th following the previous week’s total of -30,149 net contracts on April 30th.

Last Six Weeks of Large Trader Positions: EURO

Date	Lg Trader Net	Change
04/02/2013	-65701	-16606
04/09/2013	-50858	14843
04/16/2013	-29764	21094
04/23/2013	-34275	-4511
04/30/2013	-30149	4126
05/07/2013	-33533	-3384

British Pound Sterling: Weekly change of -4,479

GBP: British pound spec positions declined last week after improving for three consecutive weeks and to the best position since March 12th. British pound speculative positions decreased last week to a total of -63,086 net contracts on May 7th following a total of -58,607 net contracts reported for April 30th.

Last Six Weeks of Large Trader Positions: Pound Sterling

date	Lg Trader Net	Change Weekly
04/02/2013	-65020	1535
04/09/2013	-69969	-4949
04/16/2013	-61975	7994
04/23/2013	-60112	1863
04/30/2013	-58607	1505
05/07/2013	-63086	-4479

Japanese Yen: Weekly change of -7,433

JPY: Japanese yen net speculative contracts fell last week after improving for the previous three straight weeks and to the best level since February 26th. Japanese yen positions dropped to a total of -78,560 net contracts on May 7th following a total of -71,127 net short contracts on April 30th.

Last Six Weeks of Large Trader Positions: Yen

date	Lg Trader Net	Change Weekly
04/02/2013	-78171	10978
04/09/2013	-77697	474
04/16/2013	-93411	-15714
04/23/2013	-79730	13681
04/30/2013	-71127	8603
05/07/2013	-78560	-7433

Swiss Franc: Weekly change of +2,029

CHF: Swiss franc speculator positions improved last week after declining the previous week. Net positions for the Swiss currency futures advanced slightly to a total of -6,235 contracts on May 7th following a total of -8,264 net contracts reported for April 30th.

Last Six Weeks of Large Trader Positions: Franc

date	Lg Trader Net	Change Weekly
04/02/2013	-12015	183
04/09/2013	-10014	2001
04/16/2013	-3253	6761
04/23/2013	1179	4432
04/30/2013	-8264	-9443
05/07/2013	-6235	2029

Canadian Dollar: Weekly change of +15,932

CAD: Canadian dollar positions improved sharply last week for a third consecutive week after falling to a new low level for 2013 on April 16th. Canadian dollar positions improved to a total of -51,916 contracts as of May 7th following a total of -67,848 net contracts that were reported for April 30th.

Last Six Weeks of Large Trader Positions: CAD

date	Lg Trader Net	Change Weekly
04/02/2013	-64544	-1899
04/09/2013	-71133	-6589
04/16/2013	-75913	-4780
04/23/2013	-71679	4234
04/30/2013	-67848	3831
05/07/2013	-51916	15932

Australian Dollar: Weekly change of -23,604

AUD: The Australian dollar large speculator positions decreased sharply again last week to decline for a sixth consecutive week. Aussie speculative futures positions fell to a total net amount of +6,630 contracts on May 7th after totaling +30,234 net contracts as of April 30th.

Last Six Weeks of Large Trader Positions: AUD

date	Lg Trader Net	Change Weekly
04/02/2013	83971	-1544
04/09/2013	77879	-6092
04/16/2013	53175	-24704
04/23/2013	31257	-21918
04/30/2013	30234	-1023
05/07/2013	6630	-23604

New Zealand Dollar: Weekly change of -514

NZD: New Zealand dollar speculator positions fell slightly last week after improving the previous week. NZD contracts edged lower to a total of +28,536 net long contracts as of May 7th following a total of +29,050 net long contracts on April 30th.

Last Six Weeks of Large Trader Positions: NZD

date	Lg Trader Net	Change Weekly
04/02/2013	18387	1471
04/09/2013	25150	6763
04/16/2013	30808	5658
04/23/2013	27705	-3103
04/30/2013	29050	1345
05/07/2013	28536	-514

Mexican Peso: Weekly change of -107

MXN: Mexican peso speculative contracts were virtually unchanged last week from the previous week. Peso positions declined slightly to a total of +138,441 net speculative positions as of May 7th following a total of +138,551 contracts that were reported for April 30th.

Last Six Weeks of Large Trader Positions: MXN

date	Lg Trader Net	Change Weekly
04/02/2013	142755	14593
04/09/2013	142542	-213
04/16/2013	151288	8746
04/23/2013	146911	-4377
04/30/2013	138551	-8360
05/07/2013	138444	-107

The Commitment of Traders report is published every Friday by the Commodity Futures Trading Commission (CFTC) and shows futures positions data that was reported as of the previous Tuesday (3 days behind).

Each currency contract is a quote for that currency directly against the U.S. dollar, a net short amount of contracts means that more speculators are betting that currency to fall against the dollar and a net long position expect that currency to rise versus the dollar.

(The graphs overlay the forex spot closing price of each Tuesday when COT trader positions are reported for each corresponding spot currency pair.)

See more information and explanation on the weekly COT report from the CFTC website.

Article by CountingPips.com – Forex News & Market Analysis

The post Large FX Speculators pushed US Dollar bets to Highest Level in Almost a Year appeared first on CountingPips Forex News & Currency Trading Blog.

Monetary Policy Week in Review – May 11, 2013: 8 banks cut rates by 550 bps as BOJ easing ripples through world

CentralBankNews — Sat, 11 May 2013 20:49:00 +0000

Last week 16 central banks took policy decisions with a record eight banks cutting rates by a total of 550 basis points as the Bank of Japan’s (BOJ) monetary easing looks to become a watershed event in global monetary policy by opening a new front in the currency wars.
Only weeks after the Group of 20 finance ministers and central bank governors agreed that they ”will refrain from competitive devaluation,” Australia and Korea – two of the G20 members – surprised markets by cutting interest rates.
Observers questioned the motives behind the two rate cuts as the global economic outlook had not drastically deteriorated.
It is already clear that the ripples from the BOJ’s easing is upsetting global balances, with a range of competitors reacting to the 17 percent plunge in the value of the yen to the U.S. dollar so far this year.
The only substantial change in the policy statements from the Reserve Bank of Australia (RBA) and the Bank of Korea (BOK) from April to May was the reference to foreign exchange while their observations about growth were largely unchanged.
The other six central banks that cut rates this week did not refer to exchange rates but said a lack of inflationary pressure had given them space to boost growth.
But the RBA said the exchange rate of the Australian dollar had been “little changed at a historically high level” while the BOK said Korea’s output gap would continue for a considerable time due to slow global growth, “the influence of the Japanese yen weakening” and geopolitical risks.
To be sure, the global economy has entered a soft patch. But that is exactly the point of international agreements. When times get tough, policy makers are supposed to consider the international ramifications of their actions and look to the common good.
The official reaction of the international community, both the G20 and the Group of Seven, to the BOJ’s new and more aggressive quantitative easing is that it benefits everyone because it strengthens global growth by supporting Japan’s domestic demand and stopping deflation.
Meanwhile, individual countries are adjusting their policies to the impact of the lower yen and the inflow of excess funds to their markets from the BOJ’s easing. Data showed that Japanese investors were net buyers of foreign bonds in recent weeks.
The Reserve Bank of New Zealand (RBNZ) intervened in foreign exchange markets for the first time since 2007 to weaken its dollar. The move was hardly a surprise after the RBNZ last month pinned some of the blame for the currency’s appreciation on Japan’s “substantial quantitative easing programme, ” which is making life hard for its exporters.
Thailand has been debating how to tackle the rise in its baht currency and capital inflows with the Bank of Thailand (BoT) on Monday meeting with government and private sector representatives to discuss a response.
The Thai finance minister has been vocal in his criticism of the BOT, saying it should take the strength of the currency into account when deciding on policy and not just inflation. So far the Thai central bank has resisted pressure and kept rates unchanged, arguing the inflows are due to investors’ confidence in the Thai economy and rate cuts would not make much of a difference.

Apart from Australia and Korea, the central banks of Kenya, Belarus, Poland, Georgia, Sri Lanka and Vietnam also cut rates this week. Seven banks held rates steady: Malawi, Norway, the United Kingdom, Malaysia, Peru, Egypt and Mozambique.
Gambia was the only central bank to raise rates this week. Four percent of all rate decisions this year have favored rate hikes, a largely stable ratio. It was Gambia’s first rate rise this year, reversing two rate cuts in 2012, with the bank citing accelerating inflation, partly due to currency depreciation.

Since the BOJ announced its “new phase of monetary easing” on April 4, central banks’ policy rates have tumbled by a cumulative 1,235 basis points, accounting for 58 percent of the total decline in rates so far this year.
Although the decline in policy rates accelerated this week, the total fall this year only amounts to 2,126 basis points, still a far cry from cuts totaling 6,475 in 2012 and 7,517 in 2011. However, the fall in rates does not reflect the true extent of global monetary easing as it doesn’t take into account quantitative easing measures.
Through the first 19 weeks of this year, 24 percent of 186 policy decisions taken by the 90 central banks followed by Central Bank News have lead to rate cuts, a sharp increase from 20 percent after the first 18 weeks.
It was the highest number of rate cuts in one week so far this year, pushing down the average Global Monetary Policy Rate (GMPR) to 5.66 percent from 5.70 percent at the end of April and 6.2 percent at the end of 2012.
The majority of this year’s policy decisions still favor unchanged rates, but the trend is declining. At the end of this week, 72 percent of all decisions this year were to keep rates steady, down from 77 percent after the first 14 weeks of this year and 75 percent after the first 16 weeks.

LAST WEEK’S (WEEK 19) MONETARY POLICY DECISIONS:

COUNTRY	MSCI	NEW RATE	OLD RATE	1 YEAR AGO
KENYA	FM	8.50%	9.50%	18.00%
AUSTRALIA	DM	2.75%	3.00%	3.75%
BELARUS		25.00%	27.00%	34.00%
GAMBIA		14.00%	12.00%	13.00%
MALAWI		25.00%	25.00%	16.00%
NORWAY	DM	1.50%	1.50%	1.50%
POLAND	EM	3.00%	3.25%	4.75%
GEORGIA		4.25%	4.50%	6.00%
SOUTH KOREA	EM	2.50%	2.75%	3.25%
UNITED KINGDOM	DM	0.50%	0.50%	0.50%
MALAYSIA	EM	3.00%	3.00%	3.00%
PERU	EM	4.25%	4.25%	4.25%
EGYPT	EM	9.75%	9.75%	9.25%
SRI LANKA	FM	7.00%	7.50%	7.75%
VIETNAM	FM	7.00%	8.00%	12.00%
MOZAMBIQUE		9.50%	9.50%	13.50%

NEXT WEEK (Week 20) features five central bank policy decisions, including Serbia, Indonesia, Iceland, Latvia and Turkey.
On Monday Thailand’s finance minister meets with the Bank of Thailand’s monetary policy committee, government officials and the private sector to discuss the rise in the Thai baht. Markets are speculating the meeting will result in a rate cut. The next scheduled policy meeting by Bank of Thailand is on May 29.

COUNTRY	MSCI	DATE	RATE	1 YEAR AGO
SERBIA	FM	13-May	11.75%	9.50%
THAILAND	EM	13-May	2.75%	3.00%
INDONESIA	EM	14-May	5.75%	5.75%
ICELAND		15-May	6.00%	5.50%
LATVIA		16-May	2.50%	3.50%
TURKEY	EM	16-May	5.00%	5.75%

www.CentralBankNews.info

Mozambique holds rate steady, signs of slower activity

CentralBankNews — Fri, 10 May 2013 13:24:00 +0000

Mozambique’s central bank held its benchmark standing facility rate steady at 9.50 percent, saying it would intervene in money markets to ensure that the monetary base does not exceed 39.70 billion meticais by the end of May compared with 38.81 billion at the end of April.
The Bank of Mozambique (CPMO), which has held its rate steady this year after cutting by 550 basis points in 2012, said indicators of the economic climate pointed to lower economic activity, interrupting the upward trend that had been seen since July last year, while expectations regarding demand also showed a decline though employment prospects remained positive.
Mozambique’s inflation rate rose to 4.79 percent in April, up from 4.27 percent, though well below a peak of 16.6 percent at the end of 2010.
“The behavior of inflation in the first four months of the year reflects a scenario of a difficult early year, marked by floods that affected the food supply in some markets, especially fruits and vegetables, as well as the increase in average prices of some commodities in the international market, which weighed on domestic inflation, without neglecting the strengthening of the U.S. dollar in the domestic foreign exchange market,” the CPMO said.

  Following its recent visit to Mozambique, the International Monetary Fund (IMF) forecast that inflation would remain around 5-6 percent in the medium term despite the declining trend that was interrupted by the floods.
The IMF said Mozambique’s economy remains robust, “reflecting the rapid expansion in coal production as well as in financial services, transport and communications, and agriculture.”
   Last month the central bank cut its 2013 growth forecast to 7 percent from a previous 8 percent due to extensive flooding in the southern and central areas of the country in the first few months of the year, which affected mining output and agriculture. In 2012 the economy grew by 7.4 percent.
Mozambique’s Gross Domestic Product expanded by 2.3 percent in fourth quarter of 2012 for annual growth of 8.3 percent, up from a rate of 6.9 percent in the third quarter.
    The IMF also forecast that Mozambique’s economy would expand by around 7 percent this year as mining expands and agricultural production recovers from the floods.
The central bank said the metical was quoted at 30.02 against the U.S. dollar on the last day of April, equivalent to a monthly appreciation of 0.20 percent compared with a depreciation of 0.30 percent in the previous month, taking the cumulative and annual depreciation to 1.73 percent and 9.4 percent, respectively.

www.CentralBankNews.info

Central Bank News Link List – May 10, 2013: Time for China to cut interest rates?

CentralBankNews — Fri, 10 May 2013 10:58:00 +0000

News Analysis: Time for China to cut interest rates? (Xinhua)
Heading to G7, U.S. tells Japan to stick to currency rules (Reuters)
Analysis: Policy patience seen wearing thin as yen drops (Reuters)
Bernanke sees important risks in wholesale funding (Bloomberg)
Bank Negara maintains OPR at 3% (the star)
Vietnam cuts interest rates as global monetary easing spreads (Bloomberg)
Kittiratt urges Thai rate cut exceeding quarter percentage point (Bloomberg)
Australia central bank mutes outlook (AFP0
Fed’s Plosser wants to slow bond buys (Reuters)
Bangko Sentral peso lending remains popular on record low interest rates (gma news)
Irrational Bernanke hatred contributes to bond-bubble talk, says Krugman (MarketWatch)
www.C entralBankNews.info

New Zealand dollar falls vs USD for 3rd day. NZD/USD trades around 0.8400

CountingPips — Wed, 08 May 2013 23:55:47 +0000

By CountingPips.com

The New Zealand dollar declined against the US dollar in forex trading on Wednesday for a third consecutive day as the “kiwi dollar” fell to the lowest level since April 23rd. The NZD/USD started the week above the 0.8530 level and received some additional pressure over the past day from a rare central bank intervention in the currency markets by the Reserve Bank of New Zealand (RBNZ). The RBNZ intervened and sold kiwi dollars because the central bank feels the currency is overvalued against the other major currencies.

Other data out today showed that the New Zealand unemployment rate fell to a three-year low and surpassed economic forecasts for the first quarter of 2013. The unemployment rate registered 6.2 percent for the first quarter after a 6.8 percent reading for the fourth quarter of 2012. Economic forecasts expected the unemployment rate to stay steady at 6.8 percent.

Outlook: Support & Resistance

The NZD/USD currency pair traded right at the 0.8400 exchange rate on Wednesday at New York closing time. A close below the 0.8400 support level would indicate the bears are in control and we could look for more downside pressure. Next levels of support coming in are the 0.8350 exchange rate with the major support level at 0.8300 in line after that which has been a previous support and resistance level numerous times in recent months.

On the top side for resistance, we see 0.8450/65 as a level to watch and if we get above that, 0.8500 to 0.8535 could provide targeted resistance.

NZD/USD Changes & Ranges: Past 6 Weeks

Date	Pct Change	True Range
2013.03.31	0.88	0.0097
2013.04.07	2.08	0.0271
2013.04.14	-1.77	0.0203
2013.04.21	0.94	0.0202
2013.04.28	0.57	0.0131
*2013.05.05	-0.97	0.0195

* current week

Written by Zac Storella, CountingPips Forex Blog & Currency Research

The post New Zealand dollar falls vs USD for 3rd day. NZD/USD trades around 0.8400 appeared first on CountingPips Forex News & Currency Trading Blog.

Forex: Aussie Dollar drops on interest rate cut. AUD/USD trades under 1.0200

CountingPips — Tue, 07 May 2013 14:49:21 +0000

By CountingPips.com

The Australian dollar has declined sharply today in Forex trading against the US dollar as the reserve Bank of Australia decreased its benchmark interest rate overnight. The rate reduction was by 25 basis points and brought the interest rate to a record low standing of 2.75 percent.

The AUD/USD promptly dropped for a second consecutive day and to lowest level since March 4th under the 1.0200 exchange rate threshold. A close below 1.0194 in the Aussie/US dollar pair would mark the lowest closing level since October 2012.

The outlook for the this pair sees a resistance level at the major level of 1.0200 (previous support) while downside targets and support can be found at the 1.0150 level and the 1.0100 exchange rate further down the line. The major level of the 1.0000 looms about 150 pips away should we continue lower.

Written by Zac Storella, CountingPips Forex Blog & Currency Research

The post Forex: Aussie Dollar drops on interest rate cut. AUD/USD trades under 1.0200 appeared first on CountingPips Forex News & Currency Trading Blog.

Australian Dollar on the defensive vs US Dollar, Euro, Japanese Yen prior to RBA decision

CountingPips — Tue, 07 May 2013 00:16:18 +0000

By CountingPips.com

The Australian dollar has been on the decline today in Forex trading action ahead of Tuesday’s Reserve Bank of Australia (RBA) policy meeting and interest rate decision. The Aussie has fallen against the US dollar, Japanese yen and the European common currency in foreign exchange trading as data published today showed that Australian retail sales unexpectedly contracted in March by 0.4 percent.

Bloomberg data, based on overnight-index swap rates, shows a 53% chance of an interest rate reduction on Tuesday while large money traders, including possibly George Soros, are rumored to be betting on a rate cut.

The AUD/USD in trading today declined and ended the day near the 1.0251 exchange rate level at the New York close of business. This was a decline of approximately 50 pips on the day. The Australian dollar, meanwhile, showed more modest declines against the Japanese yen and the euro today of approximately 25 pips and 30 pips, respectively.

AUDUSD

AUD/USD Support & Resistance Levels:

The AUD/USD currency pair trades right near the 1.0250 exchange level at the current time with a downside support level coming into play at 1.0220. This level has provided support numerous times since February while a close below this level would be the lowest close since the beginning of March. Lower downside targets would bring 1.0200 and then 1.0165 to 1.0150 which would be bringing the pair to the lowest levels of 2013.

Upside targets may be capped at the 1.0300 major resistance level that has been an obstacle in the past and features the weekly pivot point very close by. If the pair can get by that obstacle the 1.0325 to 1.0350 resistance will likely come into play.

AUD/USD Changes & Ranges: Past 6 Weeks

Date	Pct Change	True Range
2013.03.31	-0.351	0.0142
2013.04.07	1.306	0.0234
2013.04.14	-2.144	0.0255
2013.04.21	-0.024	0.0118
2013.04.28	0.354	0.0163
*2013.05.05	-0.564	0.0089

* current week so far

Pivots and Trends Data:

Weekly Pivot Point: 1.0295
Monthly Pivot Point: 1.0390

Linear Regression Indicator Trend / Strength Data:

30-day current trend is BEARISH / Trend strength of -230.4 pips
60-day current trend is BULLISH / Trend strength of 52.9 pips
90-day current trend is BEARISH / Trend strength of -36.1 pips
180-day current trend is BEARISH / Trend strength of -49.7 pips
365-day current trend is BULLISH / Trend strength of 239.6 pips

Article by CountingPips Forex Blog, News & Analysis

The post Australian Dollar on the defensive vs US Dollar, Euro, Japanese Yen prior to RBA decision appeared first on CountingPips Forex News & Currency Trading Blog.