Yes, thanks, and it's especially nice to still have most of the equity in the move as the session close approaches.
Because markets basically are closed for 4.5 days -- midday today to Wed am -- traders may be positioning today to protect against further rises in US treasury yields. Better exposure over the holiday is yield rise not yield fall. Hence yield on US 10 year up, with Aussie dollar -- a comparator yield currency -- down (from overnight). I will be content if AUS near-month future finishes above 7850. That would leave it poised to resume upward move next week. And, if it drops near 7850, I'll add to my longs -- up to two.
Bought ten of my 14 long AUS futures slightly under .7800. To date, on those ten, the max profit versus max drawdown is better than 20 to 1, attributable mainly to puny drawdown. The entries are excellent, in other words. The purchases came over two sessions, the second shown by the post above. My other four longs, entered in each case after the purchases under .7800 have a much less favorable reward/risk profile. I am ahead on all four of those longs, but the max profit to max drawdown is only a little better than 1 to 1 (i.e., pedestrian). News of late presents two scenarios: RBA reportedly is selling Aus dollars, and it has a track record (reportedly) of top and bottom picking the Aus dollar. Bank currency traders in Aus reportedly are long (my side), believing that a combination of Aus yield versus USA and strength in Aus commodities will push Aussie to .8000 in short order. Both could be right, of course, with a continuing move up followed by a large drop over the long term. RBA presumably buys and sells with a longer term view than traders. Anyone else with a stake in this problem? It is a problem, after all, with a resolution that traders can help create. For instance, I can create a resolution by selling my 14 longs promptly, bagging the nice equity I expect will re-appear when Globex resumes trading, or I can wait on a home run move above .8000. Where I place my stops similarly can create a resolution.
The RBA always sells right around the 7950 range. I think that there is risk to commodities this year, which will weigh heavily on the australian economy. That is the only threat to your position I can see at the moment.
Thanks for the reply. The market, with today's extremely nice pop, is idiot-proofing my position. (I mean proofing it against mistakes by me.)
Personally speaking, i would wait for more clearer signal to sell AUD at this stage especially saw the ADP employment number came out that weak.. In a short term buy on dips is still a choice to go for, my .02...
I view today's back up in AUS as unremarkable profit taking. Recall just two sessions ago AUS could be bought more than 100 ticks lower than yesterday's high. I'm standing pat with a very large (for me) long position. Loss of nerve would require US treasury yields to move substantially higher on this week's data points. If that occurs, I'd likely run for the door (as would others).
At what level would you guys get short, short-term? And long-term where do you see the AUD for 07. I think it was up 8 percent in 2006 and some pros are calling for close to the same for 07. Again, I have a hard time seeing the dollar dropping another 8 percent over the year. Over hear, we kep hearing slow down and housing crash, but on Main Street, everybody is working andcomplaing about pries rising. I can't imagine, despite what the pundits say, any rate cuts any time soon, unless the unemployment rate starts to rise steadily or substantially.
Surfing around on Interactive Brokers for AUD options, I see them listed on CME and Globex, but no bid/asks. Is this like RFQ only? Only trade on AU time?