Forex Investment and Currency Trading

US dollar weakness
The single most important contributor to AUD strength will be a weaker US economy than is currently priced by the currency and interest rate markets. It is forecasted the ongoing weakness in the US economy as house prices continue to fall; employment contracts sharply; gas and food prices remain high and consumer spending and investment soften further. Wage pressures and core inflation are easing and the Fed will have adequate scope to ease further through 2008 and 2009. The shock that the Fed is easing further and the ongoing weakness in the US economy will cause the USD [...]

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USD approaching a top
Over the past month there has been biased towards USD strength as a disconnect formed between fixed interest and FX markets. This process has just about run its course. A Fed pause is now fully discounted into year’s end and a hike is priced in early next year. It’s diffi cult to see how the FOMC could provide yet further support to the USD. The risks are seen skewed substantially towards further Fed easing.
AUD - USD trend will still be important
On March 4 of this year people argued that the AUD was likely to correct from the [...]

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Australia seems the better bet between Oz and New Zealand as in Australia you have a more hawkish central bank and early signs of a rekindling of the M&A boom after yesterday’s announcement of a A$13B AUD-positive M&A. The move lower in gold is not bullish Aussie, but on the other hand copper and the CRB are still very close to the all-time highs so the bloom is not yet off the commodity rose. Gold is $140 USD off the highs and Ozzie is still 0.9385 so you could argue it has held in very well. Some have begun to [...]

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AUD/USD – Set to extend gains to 0.9311 after a bullish trend reversal above 0.9104.
The price retracement in AUD/USD stalled near 0.9000 after the formation of a morning doji star pattern. The resulting bullish trend reversal above 0.9104 has provided a more positive backdrop to the market. With valuations also reaching oversold levels, support at 0.9104 and 0.8956 is expected to attract buying interest for a move to resistance at 0.9311. A close above this level would then target 0.9471. Price target remains located nearby at 0.9250.

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